Content |
Network equipment (Global Market)
Communication Equipment (Global Market)
Optical Transport Network (OTN) is a key technology for building backbone fiber-optic communication networks that has replaced the synchronous digital hierarchy (SDH/SONET).
The principle of OTN technology is that signals of various formats are packed into standard containers, which are then transmitted over a fiber optic network. This ensures that any type of client signal (STM, ATM, IP, Fibre Channel, InfiniBand, etc.) can be transmitted over the transport network, as well as efficient utilization of bandwidth due to dense packaging of heterogeneous traffic.
Optical transport networks are constructed from a set of optical network elements connected by fiber-optic channels capable of providing functions such as transport, multiplexing, routing, control, monitoring and survivability of the channels over which signals are transmitted.
2024: The global PON market grew 13% to $15.54 billion over the year
At the end of 2024, expenditures on the global Passive Optical Network (PON) market are estimated at $15.54 billion. For comparison, a year earlier, costs amounted to $13.76 billion. Thus, the growth was at the level of 13%. Industry trends are addressed in the Fortune Business Insights survey published in early March 2025.
PON technology is used to organize broadband Internet access. Such networks are built on a tree-like fiber-cable architecture with passive optical splitters (splitters) on nodes. The use of PON provides a number of advantages, including reliability and economy due to the lack of intermediate active nodes, durability and resistance to external radiation, and savings in fiber, since a single cable can be used to serve dozens of subscribers. The PON architecture provides the ability to grow network nodes and bandwidth depending on the future needs of subscribers. At the same time, there are relatively high requirements for the quality of materials and installation of fiber-optic communication lines. The disadvantages of architecture include the use of optical dividers that increase attenuation.
Fortune Business Insights analysts call the COVID-19 pandemic one of the drivers of the market in question, which provoked a sharp increase in demand for remote work and distance learning platforms. This led to an increase in the load on Internet channels, and users around the world who found themselves in self-isolation required additional broadband connections to the Network. In addition, the development of the PON sector is facilitated by various initiatives to eliminate digital inequality, which provide for the construction of communication lines in rural and remote areas.
Technological advances are also having a positive impact on the industry. This is, in particular, the implementation of GPON, or Gigabit PON: this technology provides higher throughput and range of information transfer, and also supports many interfaces. Many providers consider GPON the optimal technology for the comprehensive transformation of network services. Fortune Business Insights estimates that the GPON segment accounted for about 40% of total revenue in 2024.
Geographically, the Asia-Pacific region holds the largest share in the global PON market, which is explained by government initiatives to expand digital capabilities and develop broadband Internet access. Here, expenses in 2024 amounted to $7.65 billion. For comparison, a year earlier, the figure was $6.64 billion, and in 2022 - $5.8 billion. Other key regional markets, including European ones, are also showing positive dynamics. Large companies are investing heavily in R&D related to improving PON technologies. Significant players in the global industry are named:
- Adtran;
- Calix;
- Ciena;
- Cisco Systems;
- Huawei Investment & Holding Co.;
- Infinera;
- Nokia;
- Telefonaktiebolaget LM Ericsson;
- TP-Link;
- ZTE.
In general, as noted, the observed trends indicate a steady positive trend. Fortune Business Insights analysts believe that in the future, the CAGR in the market under consideration will be 15.2%. As a result, by 2032, costs on a global scale could increase to $48.18 billion.[1]
2023
Expenditures in the global passive optical network market for the year reached $13.76 billion
In 2023, the global passive optical network (PON) market reached $13.76 billion. The industry is showing steady positive dynamics, which is explained, in particular, by the development of broadband Internet access (broadband access) in urban and rural areas. An analysis of the market situation is given in Fortune Business Insights, which TAdviser got acquainted with in early December 2024.
PON, or Passive Optical Network, is a telecommunications technology used primarily to build broadband networks. It is based on a tree-like fiber-cable architecture with passive optical splitters at the nodes. PON is used by telecommunications companies and service providers to provide end users with high-speed, low-latency Internet.
One of the key drivers of the market is the growing demand for a secure, fast and reliable network connection, it said. PON technology provides advantages such as durability and resistance to external radiation, as well as efficiency (due to the absence of intermediate active nodes). The report says that the demand for high-quality broadband access connection has increased amid the COVID-19 pandemic. In self-isolation, users around the world needed reliable Internet connections to organize remote work, distance learning and simply consume content and entertainment. Telecommunications companies have been making active efforts to expand the fiber optic infrastructure to meet the needs of subscribers.
Another driver for the industry is skyrocketing data traffic. Huge amounts of information are generated by Internet of Things (IoT) devices, robotic cars, smart home systems, and artificial intelligence services. Since PON networks can provide high throughput over long distances, they represent a viable solution to the problem of rapidly increasing data flows. In addition, governments in various countries are stimulating the development of broadband access infrastructure both in large cities and in remote settlements.
The study authors segment the market into EPON, GPON and other technologies (next generation PON). In 2023, GPON was estimated to account for approximately 40% of total costs. Geographically, the Asia-Pacific region holds the largest share thanks to targeted government initiatives to develop broadband access and policies to strengthen digital opportunities. Significant players in the global PON industry are named:
- Adtran;
- Calix;
- Ciena Corporation;
- Cisco;
- Huawei Investment & Holding Co.;
- Infinera;
- Nokia;
- Telefonaktiebolaget LM Ericsson;
- TP-Link;
- ZTE.
In general, as noted, against the background of the spread of video streaming, AI services, virtual and augmented reality systems, telemedicine platforms and other resource-intensive applications, users and organizations around the world need faster and more reliable data transmission channels. PON networks, which are capable of delivering gigabit speeds over long distances without the use of active components, meet the growing demand.
At the end of 2024, revenue in the PON network segment is estimated at $15.54 billion. Fortune Business Insights analysts believe that in the future, the CAGR will be 15.2%. As a result, by 2032, costs on a global scale could increase to $48.18 billion.[2]
Growth in sales of equipment for optical transport networks by 2% to $16 billion
At the end of 2023, costs in the global market for equipment for optical transport networks reached almost $16 billion. This is about 2% more compared to 2022. Industry trends are considered in a study by Dell'Oro Group, the results of which TAdviser reviewed at the end of October 2024.
It is noted that by the end of 2023, there was a decline in the market under consideration due to a decrease in demand in, and North America To Europe. Japan The main reasons were excess reserves, worsening macroeconomic conditions and higher interest rates in these regions.
The
 | North American service providers have created excess stocks after active equipment purchases in 2021 and 2022. According to our estimates, sales of products in this region rose by almost 30% over the specified period. The buildup has not had such a significant impact on the market in Europe and Japan, but the economy here is in an unstable state, says Jimmy Yu, vice president of Dell'Oro Group. |  |
However, as noted, spending on optical equipment in China increased significantly after two years of decline, as service providers increased investments in the optical backbone network. The largest growth in market share in 2023 was demonstrated by Ciena, FiberHome and Nokia, while Cisco and Fujitsu significantly lost ground.
According to Mordor Intelligence, in 2024 the volume of the global optical transport network industry will reach $24.91 billion. Analysts believe that in the future, the CAGR (average annual growth rate in complex percentages) will be 8.41%. As a result, by 2029, costs on a global scale will rise to $37.3 billion. One of the key growth factors is the increasing demand for high-speed Internet.[3]
2020: OTN Hardware Market Growth by 1%, to $16 Billion - Dell'Oro Group
The volume of the global market for equipment for building optical transport networks (OTN) in 2020 amounted to $16 billion, an increase of 1% compared to 2019. This is evidenced by data from the analytical company Dell'Oro Group.
According to experts, sales of such solutions increased in all regions except North and Latin America, where the decline was measured by 6% and 14%, respectively.
In EMEA countries (Europe, Middle East, Africa), the supply of equipment for optical transport networks in monetary terms in 2020 increased by 2% compared to the previous year, in China - by 1%, in the Asia-Pacific region (excluding PRC indicators) - by 13%.
According to Jimmy Yu, vice president of Dell'Oro Group, spending on optical transport networks slowed sharply by the end of 2020 due to the fact that technologies for 5G networks began to occupy a large share in the capital expenditures of telecom operators. In addition, the situation on the market was complicated by the COVID-19 coronavirus pandemic, due to which difficulties arose with the implementation of new OTN projects[4]
Notes
| The site content is translated by machine translation software powered by PROMT. The machine-translated articles are not always perfect and may contain errors in vocabulary, syntax or grammar. Read original article If you find inaccuracies or errors in the results of machine translation, please write to editor@tadviser.ru. We will make every effort to correct them as soon as possible. |