Passive Optical Network Market

Passive Optical Network Market Outlook (2022 to 2032)

The global passive optical network market size is likely to be valued at US$ 20,872.2 Million in 2022 and is expected to reach US$ 79,199 Million in 2032. The demand for passive optical networks (PON) is anticipated to grow at a CAGR of 14.3% during the forecast period. The factors attributed to the rising demand include:

• The global passive network (PON) equipment market is anticipated to develop throughout the projected period due to the rising need for green network solutions.
• Solutions for passive optical local area networks (POL) are more eco-friendly than those for traditional Ethernet local area networks built on copper.
• Workgroup switches are no longer used in POL. Instead, optical splitters are used. Since it eliminates the use of thousands of KW of energy and serves as a more economical choice, it conforms with HVAC regulations.
• Additionally, rack mount switches are not necessary, which decreases the need for non-renewable electrical equipment and lowers power consumption.
• One fiber of one kind of optic is used in a passive optical network (PON) to connect to the WGT.

Why 2022 to 2032 is anticipated to be a Golden Period for Passive Optical Network Market Players?

The expansion of the passive optical network market is being driven by the increasing penetration of telecom and internet services. The market will be driven by the increased demand for bandwidth as well as the rising use of telecom and internet services. As data-intensive applications like video on demand, videoconferencing, and Voice over Internet Protocol (VoIP) gain popularity, there is likely to be an increase in the need for Ethernet Passive Optical Network (EPON) technology.

According to the IAMAI-Kantar ICUBE 2020, the number of active Internet users in India is expected to climb from 622 million in 2020 to 900 million by 2025, a 45% increase over the next five years. As a result, as telecom and internet services become more widely used, so will the demand for passive optical networks.

Companies Grabbing Opportunities in Passive Optical Network Market

The demand for passive optical networks is rising as more people use cloud-based services and high-speed internet. The deployment of the passive optical network is accelerated by technologies utilizing optical splitters. The network service providers and internet service providers want to be ready to manage massive data traffic through the network and satisfy the needs of every individual user since they perceive an opportunity as a result of the exponential growth in demand.

The demand for passive optical networks is rising as a result of improvements in gigabit passive optical network (GPON) SoC technology. Sales of passive optical networks are driven by the development and implementation of fiber-to-the-home (FTTH) networks all over the world. Passive optical network utilization is accelerating as a result of new technologies' demand for high bandwidth applications. The minimal energy consumption when in use emphasizes the need for passive optical networks.

Since it is a point-to-multipoint system, a PON can transport data more effectively. The infrastructure needed for this form of design is drastically reduced since the main transmission line may be divided up into several little independent lines. All PONs employs unpowered splitters and optical cables, however, there are several variations.

Sudip Saha

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Key Dynamics of the Passive Optical Network Market

Growth Drivers of the Passive Optical Network Market:

During the anticipated period, the global passive optical network (PON) equipment market is anticipated to grow at a rapid rate due to the low cost of ownership and good return on investment. Due to the low cost of equipment installation, passive optical networks (PON) significantly reduce the total cost of ownership (TCO).

Additionally, highly efficient machinery may deliver substantial returns on investments. With PON, a passive distribution network with a high degree of centralization is used to accomplish this low cost of ownership. Due to reductions in both capital and operational expenses, PON also saves a substantial amount on the total cost of ownership. The riser closets and workgroup switches accounted for the majority of capital investment in the conventional network.

Challenges Overpowering the Market Growth

• The expansion of the passive optical network market is hampered by data bandwidth that is not disclosed to users due to transmission speed slowing down under high usage.
• Sales of passive optical networks are hindered by operational difficulties and expensive installation costs at the operator's interface.
• Passive optical network adoption is hampered by the existence of replacement or alternative technologies like XGS-PON. The demand for passive optical networks is hampered by the rising cost burden associated with the use of fiber optics.
• The expansion of the passive optical network industry is constrained by the NG-PON2 upcoming technology's faster speed through fiber optics.

Opportunities in the Passive Optical Network Market

• Passive optical network market share is driven by the production of large amounts of data traffic as a result of rising consumer numbers.
• Demand for passive optical networks is increasing due to prevailing requirements for significant corporate activities.
• Sales of passive optical networks are driven by developments in the consumer electronics and automotive industries.
• The demand for passive optical networks is increasing as more IT professionals conduct research and development.
• The expansion of the passive optical network market is fueled by the hunt for metals that are both efficient and reasonably priced for collecting and transmitting electrical and digital signals over long distances.

Heightened Budget Allocation in Europe for Passive Optical Networks to Propel the Regional Market Development

The Europe passive optical network (PON) market is rising due to the heightened budget allocated by the European Union (E.U.) to extend the coverage of passive optical networks in the region. The current requirements for access networks are not limited to transferring data streams from/to the internet. The popularity of Netflix, Amazon T.V., and other OTT platforms has increased the demand for bandwidth. Additionally, the advent of interactive gaming and video-on-demand has surged the deployment of broadband infrastructures. The passive optical network (PON), owing to its large bandwidth, is currently being perceived as the proper technology to enable this. PON technology is being adopted extensively and employed in various areas across the globe, thus enhancing the passive optical network market size in Europe.

In 2022, Europe held a revenue share of 23.2%, making it a potential market share for passive optical technology. Governmental support and involvement as a financial partner contribute to the expansion of the global market. Global market share increases due to the development of strong ecosystems of industry players, goods, and services, as well as interesting knowledge of PON advantages in this area.

In May 2021, Proximus, a leading Belgian operator, partnered with Nokia, a comms tech provider, to launch the first-ever PON live network, which connects the Havenhuis building in Antwerp and Proximus central office. The new deployment is in line with the inspiring 2022 vision of Proximus to boost its position as the leading fixed broadband network provider in Belgium.

USA Passive Optical Network Market Outlook

With a revenue share of 34.5%, the USA is rapidly catching up to become the market leader for passive optical networks. The region's expanding need for higher bandwidth applications fuels the market's expansion. The demand for passive optical networks is being further supported by growing awareness of environmentally friendly network solutions. The growth of fiber city initiatives in this area fuels the demand for passive optical networks. The need for effective bandwidth from an increasing number of social media influencers further suggests that the worldwide industry is likely to expand.

Further, the USA passive optical network market is expected to be driven by the leading advancements of optical network services by the key players present in the country. In addition to this, federal I.T. managers have begun gravitating towards a passive optical network (PON) as an effective substitute for copper-based Ethernet, thus boosting the demand for PON services. The market is further being propelled by strong optical network setups and growing demand for energy conservation. Additionally, factors such as USA telecom deployment plans, the increasing number of cable operators, and Google Fibre's expansion are also predicted to bolster the passive optical network market demand over the forecast period.

The various passive optical network disadvantages, such as difficulty detecting a failure, data transfer rate slow down due to increased distance between splitters and end-users, and bandwidth issues with individual users, may hinder the market growth in the coming years.

Growing Demand for Future-Centric Services to Boost the Demand for Passive Optical Network in Japan

The Japan passive optical network (PON) market size is anticipated to witness healthy growth over the forecast period owing to rising government initiatives in the region. The demand for the passive optical network (PON) is further expected to strengthen over the stipulated time period owing to robustly rising online traffic and extensive futuristic services, such as 5G and beyond mobile communication applications and services, such as high-definition video, Internet of things, artificial intelligence, and big-data analysis.

Further, the flexibility and capability afforded by passive optical network (PON) technology to carry higher bandwidths is predicted to enhance the market growth of passive optical networks (PON) in the coming years. The development of a passive optical network (PON) for a high split ratio, 50G and 100G data rate, and extended reach is also anticipated to maneuver the market growth.

• In October 2022, DZS unveiled the launch of the DZS Saber-4400 modular, compact, and coherent edge transport and optical metro platform designed for cost-effective and convenient delivery of fiber-based services.

South Korea is Witnessing Rising Demand to Upgrade Pre-Existing Networks to Passive Optical Network

The South Korean passive optical network (PON) market is expected to flourish over the predicted time frame due to the commercialization of WDM-PON aimed at providing 100 Mbits to each home for future video-centric services. Additionally, the ongoing research and development to enhance the PON services are also predicted to invigorate the passive optical network (PON) market in the region. The demand for PON is further being propelled by the growing requirement to upgrade pre-existing networks to PON/ passive optical networks for greater broadband width and the rising number of connected devices both in and out of residential homes, thus supporting the South Korean passive optical network (PON) market growth.

China and India to Witness High Growth, Asia Pacific to Lead the Passive Optical Network Market

With a market share of 40%, China holds the top spot in the Asia Pacific market for passive optical networks. The market for passive optical networks is expanding as wireless to wired optical communication transitions are starting in China. Research and development, investments, and rising internet usage all support demand for passive optical network fuels, which further forecasts market expansion.

The availability of optical fiber cable (OFC) connection from state and district capitals to block-level in India promotes the use of passive optical networks in this area. This region's technological innovations and improvements in systems administration support the expansion of the worldwide passive optical network market.

USA Passive Optical Network Market Outlook

With a revenue share of 34.5%, the USA is rapidly catching up to become the market leader for passive optical networks. The region's expanding need for higher bandwidth applications fuels the market's expansion. The demand for passive optical networks is being further supported by growing awareness of environmentally friendly network solutions. The growth of fiber city initiatives in this area fuels the demand for passive optical networks. The need for effective bandwidth from an increasing number of social media influencers further suggests that the worldwide industry is likely to expand.

Germany to Lead European Passive Optical Network Market

In 2022, Europe holds a revenue share of 23.2%, making it a potential market share for passive optical technology. Governmental support and involvement as a financial partner contribute to the expansion of the global market. Global market share increases due to the development of strong ecosystems of industry players, goods, and services as well as interesting knowledge of PON advantages in this area.

Start-ups Utilizing Old Techniques to Conquer New Trends in Passive Optical Network Market

Using existing technology, startups can avoid costly modifications to satisfy client requests. To guarantee that future client needs are contained within the same technology family, service providers observe technological evolution in addition to its durability. Better advances on that front are inspired by the capability of sharing the same connection across several users without any active components.

Among startups, CableLabs and Embedded are two that are utilizing conventional methods to encourage cutting-edge variants. Several additional startups, such as Capgemini Engineering, Fujitsu Network Communications, Mavenir Systems Inc., Radisys Corporation, Signal System Management, etc., are making headway in the passive optical network market share.

Companies to Follow Latest Trends to Capture Large Share of Passive Optical Network Market

The passive optical network market players are concentrating on technical developments to increase the networks' speed and effectiveness. Businesses are switching from the 2.5Gbit/s and 1.25Gbit/s data rates of the gigabit ethernet passive optical network (GPON) to the maximum 10Gbit/s symmetric speeds of XGS-PON and other technologies like Next-Generation Passive Optical Network 2 and 25 Gigabit Symmetrical Passive Optical Network. Due to the widespread use of smart grids, e-government services, and cloud computing, the market trends for passive optical networks are on the upswing.

Key players in the Passive Optical Network Market are

• ZTE Corporation
• Nokia
• Calix
• FUJITSU
• Mitsubishi Electric Corporation
• NXP Semiconductors
• ADTRAN Inc.
• Huawei Technologies Co. Ltd.
• Extralink
• TP-Link Technologies Co. Ltd.
• Fotech Solutions Ltd.
• Intelligent Fiber Optic Systems Corporation (IFOS)
• OptaSense
• Silixa Ltd
• RJC Enterprises

Recent Developments in the Passive Optical Network Market:

• To bring together optical network operators and top system and component suppliers to promote and expedite the development and implementation of 25GS-PON technology, Nokia launched the 25GS PON MSA Group in 2021.
• Verizon Communications, a USA-based telecom giant, purchased TracFone Wireless, Inc. in 2021 for an unknown sum. With this purchase, Verizon broadens its product offering and gives a new client base access to its wireless network, which is among the best in the business, and a full range of mobility goods and services. An American company called TracFone Wireless, Inc. offers prepaid, no-contract cell phones.
• In October 2019, the announcement of the Start FTTP Broadband Rollout in South West was provided by Jurassic Fiber based in the United Kingdom.
• In April 2020, R&M, AECOM, Anixter, and Belden joined the Association for Passive Optical LAN to further support the continued adoption and education of fiber-based networks.
• In May 2021, an India-based internet service provider company namely AirFiber, launched data services using Gigabit Passive Optical Networking (GPON).
• In August 2021, a USA-based infrastructure provider named CommScope, launched a coexistence portfolio to upgrade their PON networks to increase data speeds and deliver additional services without facing replacing or adding fiber to their existing PON infrastructure.

Report Scope

Key segments covered in Passive Optical Network Market

Component:

• Optical Power Splitters
• Optical Filters
• Wavelength Division Multiplexer/De-multiplexer

Structure:

• Ethernet Passive Optical Networks (EPON)
• Gigabit Passive Optical Network (GPON)

Region:

• North America
• Latin America
• The Asia Pacific
• Middle East and Africa
• Europe