Optical transport demand to reach $18bn in five years

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According to the latest forecast report by research firm, Dell’Oro Group, demand for optical transport equipment is predicted to increase to $18bn by 2026. 

The Optical Transport 5-Year Forecast Report stated that all of the market growth will be from sales of DWDM systems that deliver wavelength speeds in excess of 200Gb/s. However, IPoDWDM is expected to lower the overall demand for DWDM systems.

Amongst the report’s other findings, the market is expected to grow at a three per cent compounded annual growth rate (CAGR), driven by higher demand in all major regions. Coherent wavelength shipments on DWDM systems are forecast to grow at a 12 per cent CAGR, while the ZR optics market, comprised of 400ZR and 800ZR, is predicted to surpass $600m by 2026.

Jimmy Yu, vice president at Dell’Oro Group said: ‘I am excited to see how the Optical Transport market unfolds in the next few years. Drivers of our growth prediction include the growing global economy, government initiatives to fund the reach of broadband to rural areas, and overall network upgrades to align with customer demand for more bandwidth. There will, however, be some bumps in the road.’

‘It will be interesting to watch how new technologies such as 400ZR and 1.2Tb/s-capable wavelengths change the market dynamics,’ continued Yu. ‘Will 400ZR really drive the adoption of IPoDWDM, an architectural concept that originally came out over a decade ago? If it does, will it change the demand profile for new generations of coherent technology such as 1.2 Tbps-capable modules scheduled to be released in a year? For the first question, I think it will. For the second question, I think it might.’

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