Optical Market Forecast to Grow at Five-Year CAGR of 4 Percent
REDWOOD CITY, Calif. – January 21, 2025 – According to a newly published forecast report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the Optical Transport equipment market is forecast to return to growth following a steep decline in 2024 that was caused by oversupply and poor macroeconomic conditions. After this corrective period, the optical market is projected to grow at an average annual rate of 4 percent for the next five years, bringing the market size to $16 billion by 2029.
“We believe the Optical Transport equipment revenue decline in 2024 was a corrective phase in the market cycle to align supply with demand,” said Jimmy Yu, Vice President at Dell’Oro Group. “Typically, after taking a step back on purchases, service providers are better positioned to judge future equipment needs, creating a more positive environment for both the network operators and equipment manufacturers,” added Yu.
Additional highlights from the Optical Transport 5-Year January 2025 Forecast Report:
- Cumulative WDM capacity installed is forecast to grow at a 30 percent average annual rate through 2029 when accounting for the extra capacity installed before the pandemic and the subsequent inventory correction that followed.
- While much of data center interconnect (DCI) is projected to shift to IPoDWDM in metro applications, DWDM Long Haul for DCI is expected to grow at a five-year CAGR of 12 percent, driven by large Internet content providers (ICPs).
- The market will continuously shift to higher wavelength speeds to reduce the price-per-bit and increase spectral efficiency. The highest speed available in 2025 is 1.6 Tbps-capable wavelengths. We believe 2.4 Tbps-capable coherent technology is under development and will be available as early as 2027.
About the Report
The Dell’Oro Group Optical Transport 5-Year Forecast Report offers a complete overview of the Optical Transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, wavelength shipments (by speed up to 2.4 Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers, optical switch, disaggregated WDM, and DCI. To purchase this report, please contact us at dgsales@delloro.com.
About Dell’Oro Group
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
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