The global Optical Transport equipment market recorded a strong recovery in Q2 2025, growing 14 percent year-over-year (Y/Y), according to the latest Dell’Oro Group report. After six consecutive quarters of weak sales, the industry rebounded on the back of rising demand for disaggregated WDM systems and data center interconnect (DCI) solutions.
Jimmy Yu, Vice President at Dell’Oro Group, highlighted the shift: “One area contributing to the strong growth for optical was the rising demand for disaggregated WDM — a concept that arose over a decade ago when cloud providers and communication service providers wanted a more open, vendor-agnostic environment.”
Key Drivers of Growth in Optical Transport Market Q2 2025
Disaggregated WDM momentum: The disaggregated WDM market surged nearly 35 percent Y/Y, fueled by strong adoption across transponders, optical line systems (OLS), and ZR/ZR+ optics for IP-over-DWDM (IPoDWDM).
Cloud provider investments: Cloud companies were the largest growth contributors, with direct purchases of WDM systems increasing 60 percent Y/Y.
Optical plugs demand: Strong revenue growth was reported for ZR/ZR+ optical pluggables, as operators expanded IPoDWDM deployments.
Telecom service provider spending: Communication service provider investments returned to positive growth, reversing earlier declines.
Leading Vendors in Optical Transport Market
The top six vendors by market share in Q2 2025 were:
Huawei
Ciena
Nokia
ZTE
FiberHome
Cisco
These companies continue to dominate the market with innovations in coherent optics, DCI solutions, and open optical networking.
Outlook for Optical Transport Equipment
The strong double-digit rebound reflects the market’s transformation toward open and flexible architectures. With cloud traffic surging and hyperscalers investing heavily in IPoDWDM and WDM systems, demand for high-capacity optical networks is expected to remain strong through 2025.
As cloud providers and telecom operators push for vendor-agnostic solutions, disaggregated optical transport equipment will remain a key growth engine. Vendors that can deliver cost-efficient, high-performance, and scalable optical solutions are well-positioned to capture future opportunities.
Huawei
In August 2025, Huawei and Saudi telco stc achieved the world’s first live optical trial delivering 2.4 Tbps per port using the OptiX OSN 9800 K12 platform. The system reached 96 Tbps per single fiber and integrated quantum key distribution (QKD) for secure encryption, along with automated provisioning to accelerate service delivery.
At Global Optical Summit 2025 (North Africa) and MWC Shanghai, Huawei rolled out its Fifth Generation Fixed Network Advanced (F5G-A) optical portfolio—targeting AI, smart campuses, and industrial networks. It also introduced “Fiber-in Copper-out,” fine-grain OTN (fgOTN), and fiber-based sensing to drive industrial intelligence.
Ciena
Ciena has around 15–20 percent global share and nearly 50 percent share in the U.S. optical transport equipment market.
According to Cignal AI, Ciena’s direct sales to cloud/co-location operators soared, with WaveLogic 6e components in volume and 400ZR/ZR+ pluggables up over 50 percent quarter-on-quarter.
Nokia
In February 2025, Nokia said the €2.3 billion acquisition of Infinera was granted unconditional approval from the EU. This deal elevates Nokia to the second-largest optical networking vendor globally with approximately 20 percent market share, behind Huawei. It strengthens Nokia’s ability to serve tech giants like Amazon, Microsoft, and Alphabet as AI-fueled data center investments accelerate.
Following the acquisition, Nokia reportedly saw over 50 percent growth in cloud customer revenue, including new orders for 800ZR+ pluggables—particularly aimed at regional AI clusters.
Cisco
Cisco saw a 31 percent increase in optical revenue from cloud-based customers in Q2 2025, according to Cignal AI.
