Dell’Oro: ZTE ban impacted Q2 Optical transport equipment market

The Optical Transport network equipment market declined in 2Q18 due to the ZTE ban, according to a recently published report from Dell’Oro Group

As a result of the ZTE ban, revenue from China declined 13 percent year-over-year.

“The optical transport network equipment market year-over-year decline in 2Q18 was entirely due to fewer sales into China,” said Jimmy Yu, Vice President at Dell’Oro Group. “Demand outside of China continued to improve, which is a great sign for the 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,” added Yu.

Additional highlights from the 2Q18 Optical Transport Quarterly Report:

• Huawei held the highest Optical Transport market share in the quarter followed by Ciena and Nokia.
• Demand for interconnecting data centers (DCI) with WDM links maintained a high growth rate. We estimate DCI grew nearly 40 percent year-over-year, driven by both U.S. and Chinese based internet content providers.
• Deployment of 200 Gbps coherent wavelengths was exceptionally strong in the quarter. Due to the tidal shift towards wavelength speeds higher than 100 Gbps, we predict 200 Gbps shipments will be two-times higher in 2018, and revenue contribution from 100 Gbps shipments will slow further.