Revenues for the optical transport network equipment market slipped 4% year-on-year to $3.5 billion in the second quarter of 2018 due to the ZTE supplier ban in the US, according to a recently published report from Dell’Oro Group.
Optical transport revenues from China alone declined 13% year-on-year as a result of the ZTE ban, and that was was enough to drag down global numbers, said Jimmy Yu, VP at Dell’Oro Group.
“The optical transport network equipment market year-over-year decline in 2Q18 was entirely due to fewer sales into China,” said Yu.
That said, he added that demand outside of China continued to improve, which is a good sign for overall market health. “Now that the ZTE ban has been lifted, we think optical revenue from China will increase substantially in the second half of the year,” Yu said.
According to Dell’Oro’s 2Q18 Optical Transport Quarterly Report, Huawei held the highest optical transport market share in Q2 followed by Ciena and Nokia.
Demand for interconnecting data centers with WDM links maintained a high growth rate. Dell’Oro estimates that the data center interconnect (DCI) market grew nearly 40% year-over-year, driven by both US and Chinese based internet content providers.
Deployment of 200 Gbps coherent wavelengths was exceptionally strong in Q2. The report predicts that 200 Gbps shipments will be two times higher in 2018 compared to last year due to the tidal shift towards wavelength speeds higher than 100 Gbps – consequently, revenue contribution from 100 Gbps shipments will slow further.