The Dell'Oro Group, an information company, has released its industry optical transport 5-year forecast report. Among the report's findings is a forecast that demand for optical transport DWDM equipment will exceed $17 billion by 2026. Over the next five years, sales of DWDM long-haul systems are expected to grow faster than sales of WDM metro systems.
Other highlights include a forecast for DWDM long-haul revenues to grow at a five-year compound annual growth rate (CAGR) of 5%. Meanwhile, WDM metro revenue is expected to grow at a five-year CAGR of 3 percent. Annual capacity shipments are expected to grow at an average annual rate of more than 30 percent, while spectrum efficiency is expected to improve at an average annual rate of 9 percent.
Despite the amount of turbulence in the market, we don't see the demand for DWDM equipment abating," said Jimmy Yu, vice president of Dell'Oro Group. In fact, the biggest issue is that demand seems to be growing faster than supply. So even with a mild recession, we think the worst-case scenario is that demand will keep pace with supply more quickly. As a result, we expect DWDM system revenues to continue to grow. The only difference over the next five years compared to previous years is that we expect more growth in the DWDM long haul business as IPoDWDM should reduce the use of WDM Metro systems in data center interconnects.
