Table of Contents
Cloud providers were the fastest-growing customer segment, increasing spending 58% year-over-year
In sum — what to know:
Cloud spending jumped 58% year-over-year – Hyperscalers drove the biggest share of Q3 growth, boosting demand for backbone and DCI capacity.
DCI rose 34% on AI and cloud traffic – Direct DCI sales remained the strongest application as operators scaled interconnects.
Ciena and Nokia gained share – Both added more than one point of market share, with additional gains for 1Finity, Adtran, Cisco, and Smartoptics.
The global optical transport market grew 15% year-over-year in 3Q 2025, driven by strong investment from cloud providers and rising demand for high-capacity data center interconnect (DCI) links, according to new figures from Dell’Oro Group.
The report noted that cloud providers were the fastest-growing customer segment, increasing spending 58% year-over-year as AI and cloud workloads drove the need for more long-haul and metro backbone capacity. The DWDM long-haul segment also expanded sharply, rising 24% year-over-year.
DCI remained the market’s main engine, with direct sales climbing 34% year-over-year. Non-DCI deployments grew 7%, supported by increased spending from communication service providers upgrading optical infrastructure, according to Dell’Oro.
Vendor shifts continued through the first nine months of 2025. Ciena and Nokia each gained more than one percentage point of market share, while 1Finity, Adtran, Cisco, and Smartoptics posted smaller gains as demand widened across applications and regions.
Ciena captured 50% of cloud provider optical transport system revenue in the most recent quarter, while Nokia accounted for 30%, according to Dell’Oro Group.
“I think most of the demand was due to the build out of new data centers as well as the addition of capacity to existing sites. I believe AI workloads contributed to this demand, but it is hard to distinguish whether equipment was purchased specifically for AI data centers. That said, in the near future, we do expect AI data centers to drive even more demand for optical transport as cloud providers build scale-across DCI to connect GPU clusters,” Jimmy Yu, VP at Dell’Oro, told RCR Wireless News.
“Spending for DCI will vary on a year-to-year basis, but on average, we anticipate double-digit growth rates to continue for a few more years. The expectation is that DCI will also continue shifting toward IPoDWDM. Hence, demand for ZR/ZR+ optical modules and optical line systems (OLS) will be on the rise,” he added.
