BOSTON (August 18, 2025) – The worldwide optical transport market returned to growth in 2Q25, up 9% year over year to $3.8B according to Cignal AI’s preliminary 2Q25 Transport Hardware & Markets report.
Suppliers to Cloud & Colo operators led the rebound. Ciena derived nearly 40% of its revenue from this customer market, with WaveLogic 6e shipping in volume and 400ZR/ZR+ shipments rising more than 50% QoQ. Nokia, in its first full quarter after the Infinera acquisition, grew cloud customer revenue by over 50% and booked additional orders for 800ZR+ pluggables for regional AI clusters. Cisco revenue from cloud operators jumped 31%.
“Hyperscalers are single-handedly pulling the optical transport market out of its 2024 doldrums,” said Kyle Hollasch, Lead Analyst at Cignal AI. “Spending by Cloud Operators hit a record level, and Service Provider gains are being driven by the demand for managed optical fiber networks in service of AI-related connectivity.”
Additional Details from the Preliminary 2Q25 Transport Hardware & Markets Report:
- Excluding China, optical sales rose 15% as Cloud & Colo spending surged to nearly $1B and Service Provider purchases resumed after an extended inventory digestion.
- Cloud and Colo operators now account for one-fifth of direct spending on optical transport, an amount that doesn’t reflect the massive capacity installed and leased from service providers
- The share of Metro WDM spending remains historically low as IP-over-DWDM pluggable optics in routers displace optical transport hardware, accounting for an additional $2 billion per year.
- Most vendors reported positive book-to-bill as North American carriers accelerated orders.
- While tariff policy remains volatile and some vendors report higher costs, suppliers and customers do not appear to be adjusting pricing and orders as a result.
Live Presentation Available
Results from Cignal AI’s Transport Hardware Report are presented live each quarter by Lead Analyst Kyle Hollasch. Clients are welcome to register for a report discussion on September 11th, 2025.
About the Report
Cignal AI’s Transport Hardware & Markets Report is issued each quarter and examines optical and packet transport equipment revenue across all regions, customers, and equipment types. The preliminary analysis is based on financial results, independent research, and guidance from individual equipment companies. Hardware forecasts are reviewed and released in the following weeks, along with spending trends by operator type.
The report examines revenue for metro WDM, long-haul WDM and submarine (SLTE) optical equipment, and access, aggregation, edge, and core routing equipment in six global regions. It also tracks equipment spending by end-customer market type, including traditional service provider, cloud/hyperscale, and enterprise/government network operators. Key market segments such as Compact Modular and Packet-OTN equipment as well as shipments of ROADMs are also included.
Vendors in the report include Adtran, Alaxala, Ciena, Cisco, Ekinops, Fiberhome, Fujitsu, HPE Huawei, Mitsubishi Electric, NEC, Nokia, Packetlight, Padtec, Ribbon, Smartoptics, ZTE as well as other vendors. A full report description, articles, and presentations are available on the Cignal AI website.
About Cignal AI
Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.
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