Optical networking refers to the means of communication via an optical fiber in which the signal is encoded into the light pulse and then transmitted among different nodes of the telecommunication network. This is operated from a limited range of LAN (Local Area Network) to WAN (Wide Area Network) that can cross metropolitan areas along with national and international transoceanic distances.
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Market Research Report (MRFR) observes that the global optical network hardware market had reached the value of USD 14 Billion in 2017 and will cross that value reaching USD 32 billion by 2023. The market is set to expand at a healthy CAGR of 13.85% over the forecast period (2017-2023).
Drivers and Restraints
One of the primary drivers contributing to the market growth is the increasing demand for FTTH (fiber to the home) and FTTB (fiber to the building) solutions. Moreover, the optical network equipment market is expanding at a continuous pace in developed nations although there is an economic downturn. This could be because of a large number of mobile internet users and high household internet penetration.
Another growth driver considered by MRFR is the underlying technology shift within the optical network. Backed by these factors, the growth of next-generation technologies seems inevitable. In addition, growing demand for IPTV and broadband connections are fueling the optical networking market to a large extent.
On the contrary, the high installation cost of optical networking equipment could potentially curb the early adoption of optical networking equipment. However, increased digital data traffic and the rapidly increasing demand of bandwidth, growing market of data centers, the growth of cloud storage adoption by various organizations are set to propel the global optical network market to higher dimensions.
The market for optical network hardware is segmented on the basis of equipment and application.
By equipment, the market is segmented into WDM and SONET/SDH or Wavelength-Division Multiplexing and Synchronous optical networking/synchronous digital hierarchy. Wavelength-Division Multiplexing is a highly popular technology that aides in multiplexing of many optical fiber carrier signals into a single fiber optic cable by using different wavelengths of light. The biggest advantage of WDM is that it can carry multiple wavelengths in a single fiber cable. Enterprises make extensive use of this technology as it offers various benefits such as full duplex transmission, similar Global Optical Network Hardware Market components are used, and it also provides high security. The multiplexing provides higher bandwidth which is helpful in achieving the high-speed internet across the optical fiber channel.
Application-wise, the market is segmented into datacenter, smart cities, broadband infrastructure, and fiber-optic network. The market for broadband is surging at a CAGR of 14% on account of the increasing rate of internet and smartphone penetration. Broadband infrastructure is comprised of wired technologies and wireless technologies, among which FTTP (Fiber to the Premise) accounts for close to 7% of global broadband subscriptions, thereby augmenting the growth opportunity for optical network hardware market. Also, the datacenter application is anticipated to grow with 15% CAGR.
Based on region, the optical network hardware market is segmented into North America, Europe, Asia Pacific, and Middle East & Africa.
Among these, North American region was leading the market in the year 2017 and is projected to continue dominating the global market throughout the forecast period. The regional market is set to grow with a CAGR of 13%. The United States (U.S) and Canada are the prominent regions contributing to the growth of the market in North America.
Whereas, the Asia Pacific region is exhibited to be the fastest growing region growing at a CAGR of 16.75% over the review period. The growing investment by the government bodies in the region for building high capacity network coupled with growing trend of broadband network and emerging data center market is responsible for the stupendous performance of the optical network hardware market in the region.
The key players in the market for optical network hardware include Ciena Corporation, Huawei Technologies, Infinera, Cisco systems, Alcatel Lucent, Ericsson, ADVA Optical Networking, ADTRAN, and ZTE Corporation.
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