Optical Transport Equipment Market Grew 15 Percent Year-over-Year in 2Q 2026, According to Dell’Oro Group

Dell’Oro Group reported that Optical Transport equipment revenue grew 15% year-over-year in 2Q 2026, with data center interconnect revenue from IPoDWDM ZR/ZR+ and WDM Systems rising 45% in the period. The results point to stronger demand for optics used in data center connections and long-distance backbone links.

Market Overview

Dell’Oro Group said Optical Transport equipment revenue increased 15% year-over-year in 2Q 2026. The firm attributed growth to demand for data center interconnect (DCI) services.

For DCI, revenue from IPoDWDM ZR/ZR+ and WDM Systems grew 45% year-over-year during the quarter.

Key Findings

“This was another quarter of solid growth for the Optical Transport market,” said Jimmy Yu, Vice President at Dell’Oro Group. Yu also cited demand for optical network equipment between neighboring data centers and across long-distance backbones.

Yu said, “There is strong demand for optical network equipment between neighboring data centers and across long-distance backbones. This is especially true in North America, where many of the largest AI data centers reside.”

Yu estimated that “more than 40 percent of Optical Transport equipment revenue was driven from this region in the quarter.”

Supplier and Segment Performance

The report said cloud providers purchased WDM Systems and IPoDWDM ZR/ZR+ optics at double-digit year-over-year growth rates in the quarter. It also stated cloud providers accounted for 34% of Optical Transport market revenue.

Dell’Oro Group reported that disaggregated WDM optical line systems (OLSs) grew 80% year-over-year. It identified Ciena and Nokia as leading vendors in that segment.

Regional Performance and Vendor Ranking

The report said Optical Transport revenue grew in every major region except Asia Pacific due to a decline in China. It attributed the China decline to spending shifts from telecom infrastructure to compute infrastructure.

For the trailing four-quarter period covering 3Q 2025 through 2Q 2026, Dell’Oro Group listed the top four vendors as Huawei, Ciena, Nokia, and Cisco (Acacia).

Analyst Outlook

In its summary of 2Q 2026 results, Dell’Oro Group did not provide a separate forward outlook beyond the quarter’s reported performance and trailing four-quarter vendor list.

This Analyst Signals brief reflects the reported 2Q 2026 revenue growth and the quarter’s segment and regional results as described in the Dell’Oro Group note.

This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.