Optical transport market declined 6 percent in 4Q 2023

According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the Optical Transport market declined 6 percent year-over-year in fourth quarter 2023 due to reduced demand in North America, Europe, and Japan.

“Excess inventory, worsening macroeconomic conditions, and higher interest rates were the main reasons cited for the decline in these regions,” said Jimmy Yu, Vice President at Dell’Oro Group. “North American service providers accumulated excess inventory after splurging on equipment in 2021 and 2022. We estimate that North American optical equipment sales increased nearly 30 percent in that period. Hence, a decline in 2023 was expected to occur. Inventory build-up was less of an issue in Europe and Japan. The economy, however, was on unstable ground for the past year. Europe’s GDP is expected to be up only half a percent in 2023 and Japan has technically entered an economic recession in the second half of 2023,” added Yu.

Additional highlights from the 4Q 2023 Optical Transport Quarterly Report:

• The worldwide Optical Transport market grew 2 percent in full year 2023, reaching nearly $16 billion.
• Spending on optical equipment significantly improved in China after two years of decline as service providers increased investments in their optical backbone.
• The vendors that gained the most market share in 2023 were Ciena, FiberHome, and Nokia. The vendors that lost the most market share in the year were Cisco and Fujitsu.

Dell’Oro