Optical transport market to decline in 2024 – report

Created May 29, 2024
News and Business

According to a recently published report from Dell’Oro Group, the optical transport equipment market declined 13% year-over-year in 1Q 2024 and is now predicted to decline for the full year 2024. The downturn is mainly due to negative macroeconomic circumstances and an excess of inventory, says the company.

The report finds the optical transport market is forecast to decline by 2% in 2024 due to customers working through inventory and exercising controlled capital spending in an uncertain economic environment. It says the DWDM market declined in most parts of the world. The largest declines were in North America and parts of Asia Pacific. The only two markets that grew year-over-year were China and the Middle East and Africa (MEA) region. China grew 8% and MEA grew 16%.

Three vendors—Cisco, Huawei, and ZTE—gained more than 1%age point of market share in 1Q 2024 compared to the year ago period.

“Customer’s excess inventory of DWDM systems continued to be at the centre stage of the Optical Transport market decline in the first quarter of 2024,” said Jimmy Yu, vice president at Dell’Oro Group (pictured). “However, we think the steeper-than-expected drop in optical transport revenue in 1Q 2024 may have been driven by communication service providers becoming increasingly cautious about the macroeconomic conditions, causing them to delay projects into future quarters,” added Yu.

The Dell’Oro Group Optical Transport Quarterly Report offers in-depth coverage of the market with tables covering manufacturers’ revenue, average selling prices, and unit shipments (by speed up to 1.2+ Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, data centre interconnect (metro and long haul), and disaggregated WDM.

In March of this year, Dell’Oro’s Quarterly Report found that the optical transport market declined 6% year-over-year in fourth quarter 2023 due to reduced demand in North America, Europe, and Japan. However, the worldwide Optical Transport market grew 2% in full year 2023, reaching nearly US$16 billion.

For more information, visit www.delloro.com



This article was written
by Peter Dykes

Peter Dykes is a independent telecoms and technology journalist who has over that last 30 years written for a wide range of B2B publications and companies. A former BT engineer, he specialises in networks and associated support systems. He is currently Editor of Optical Connections.