The global optical transport equipment market recorded strong momentum in 2025, fueled by accelerating investments from cloud providers and the rapid expansion of data center interconnect (DCI) infrastructure, according to Dell’Oro Group.
The study reveals that the optical transport market grew 10 percent in 2025, with revenue from direct purchases of wavelength division multiplexing (WDM) equipment for DCI rising nearly 40 percent during the year. The surge highlights the growing importance of high-capacity connectivity between hyperscale and AI-driven data centers.
Cloud Providers and AI Infrastructure Boost Optical Spending
“Sales of optical equipment for DCI spiked in 2025 due to huge demand from cloud providers,” said Jimmy Yu, Vice President at Dell’Oro Group.
Direct cloud provider purchases increased around 50 percent in 2025 as hyperscalers invested heavily in WDM transponders, ZR optics, and optical line systems. While hyperscale companies continued to dominate spending, emerging neo-cloud providers also began increasing investments in optical transport infrastructure.
Looking ahead, Dell’Oro expects continued strong growth in 2026 as cloud providers scale DCI networks to support expanding AI data center footprints.
Disaggregated WDM and ZR Optics Drive Market Expansion
Several technology segments contributed to the strong 2025 performance:
Both Optical Transport Systems and IPoDWDM ZR/ZR+ optics delivered significant growth.
The Disaggregated WDM segment exceeded expectations, growing around 40 percent across transponders, optical line systems, and IPoDWDM ZR/ZR+ deployments.
Rising AI workloads and inter-data-center traffic continued to push demand for high-capacity optical networking.
Top Optical Transport Vendors in 2025
The report ranked the top system vendors by global revenue share in 2025:
Huawei
Ciena
Nokia
ZTE
Cisco
In the DCI segment specifically, Ciena, Nokia, and Cisco led the market, with a high concentration of revenue coming from North America.
Outlook for 2026
Dell’Oro forecasts the Optical Transport market will grow another 10 percent in 2026. Revenue tied to DCI is expected to expand at a significantly faster pace, driven by ongoing hyperscale cloud expansion and the build-out of AI-focused data center ecosystems.
The findings underline how AI, cloud computing, and next-generation data center architectures are reshaping the optical networking landscape and driving sustained demand for high-performance transport infrastructure.
BABURAJAN KIZHAKEDATH
