For fiber optical communication systems, the dispersion is a problem can't get ignored.
As in digital fiber optical communication systems, the transmitor sends light pulses to the recevier. Dispersion is the spreading out of a light pulse in time as it propagates down the fiber.
Dispersion in optical fiber includes model dispersion, material dispersion and waveguide dispersion.
Model dispersion happens in multi-mode fibers. Multimode fibers can guide many different light modes since they have much larger core size, each mode enters the fiber at a different angle and thus travels at different paths in the fiber.
For commonly used single-mode fiber systems, there are material dispersion and waveguide dispersion.
Material dispersion is the result of the finite linewidth of the light source and the dependence of refractive index of the material on wavelength.
As below picture shows, the refractive index of light in glass varies with the light wavelength. That's the cuase of material dispersion.

Waveguide dispersion is caused by the fact that some light travels in the fiber cladding compared to most light travels in the fiber core.
Because of the dispersion, the signal is distored on the reciver's end. If the distortion is not big enough, the recevier can still judge the signal and recover the right information. If the distortion is too much, the recevier can't recover the information anymore. This threshold is the dispersion tolerance of the optical module. The modules with higher dispersion tolerance would pay more effort on eliminate the bad effect of dispersions, so the cost would be higher, and results in higher sales price.

