100G, 200G WDM to drive optical transport sales growth through 2020: Dell'Oro

Continued interest in WDM technology, particularly at transmission rates of 100 Gbps and higher, will enable sales of optical transport equipment to reach $15 billion by 2020, according to a new report from Dell'Oro Group.

The most recent report would appear to signal that Dell'Oro isn't as optimistic about optical transport sales growth as it had been earlier. The company released a report in July 2015 that predicted the optical network hardware market would reach the $15 billion mark by 2019 (see "100G, 200G metro WDM optical transport growth drivers through 2019 says Dell'Oro").

Regardless, the forecast period will see a gradual shift in operator's interest from 100-Gbps to 200-Gbps wavelengths, Dell'Oro predicts in its most recent "Optical Transport 5-Year Forecast Report."

"Three interrelated technology trends are expected to occur in the WDM market during the next five years," explained Jimmy Yu, vice president at the market research firm. "First, we expect an increasing amount of 200-Gbps wavelength shipments through the next five years; second, demand for flexible modulation line cards will significantly rise and become a growing share of 100-Gbps and 200-Gbps wavelength shipments; and third, we expect to see that 100-Gbps wavelength revenue will likely peak and begin its descent in the outer forecast years, due to the market's move towards 200-Gbps wavelengths in metro applications."

The interest in WDM and, in particular, high-speed transmission isn't news (see, for example, "Optical network system spending increases sequentially in second quarter 2015: IHS"). The market has seen fiber-optic networks move away from SONET/SDH transmission technology to wavelength-based Optical Transport Network (OTN) and Ethernet transmission.

Along these lines, Dell'Oro predicts that as WDM sales climb, revenues from multiservice multiplexer and optical switch platforms will decline. In fact sales of WDM-based optical transport gear for metro and long-haul applications will provide all of the overall revenue growth within the forecast period, Dell'Oro says.

Within this niche, demand for line cards capable of optical transmission at 100 Gbps or higher -- mostly 200 Gbps, Dell'Oro predicts – will grow at a five-year compounded annual growth rate (CAGR) of 120%, the report states.

The "Optical Transport 5-Year Forecast Report" details the optical transport market, with tables that cover manufacturers' revenue, average selling prices, unit shipments, tributary/line or wavelength shipments (by speed up to greater than 100 Gbps). The report tracks DWDM long-haul terrestrial, WDM metro, multiservice multiplexers, and optical switch equipment.

For more information on high-speed transmission systems and suppliers, visit the Lighwave Buyer's Guide.