Optical transport market revenue to jump to $83B in next five years, says Dell’Oro

The optical transport market is on the cusp of new growth.

Over the next five years, Dell’Oro forecasts that the transport equipment demand to be $83 billion. Driven by sales of coherent DWDM systems, the research firm noted that this cumulative revenue is up 10 percent compared to the previous five-year period.

Several trends will also influence the 5-year forecast.

For one, the optical transport market is expected to approach $18 billion by 2027. Likewise, DWDM will see growth during this period. Dell’Oro raised its DWDM Long Haul forecast due to the growing need for what it says is network capacity and increasing use of integrated C+L band optical line systems. Also, demand for WDM equipment for the metro and long-haul data center interconnect (DCI) is expected to grow through the forecast period, with most of the growth in long-haul systems.

New optical rates will also be a factor. A new generation of coherent DSPs will begin shipping late this year. By 2027, nearly one-third of shipments will be comprised of DSPs capable of transmitting 1.2 Tbps and 1.6 Tbps signals over a single wavelength.

“We slightly raised our outlook for Optical Transport equipment,” said Jimmy Yu, Vice President at Dell’Oro Group. “We believe the demand for long haul equipment is better than we had originally thought and, while working on the report, identified more items that could further improve future market revenues than lower them.”

He added that “although year-to-year spending on optical equipment is lumpy, the direction for bandwidth consumption remains steady, pointing up and to the right.”

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