Passive optical network (PON) equipment is used in fiber to the home (FTTH) or fiber to the building (FTTB) network architecture for the delivery of high-speed broadband services. PON infrastructure offers a number of advantages such as higher bandwidth, improved security, lower installation and maintenance costs, and longer operational lifespan as compared to traditional copper networks. Growing demand for fiber connectivity, proliferation of smart homes and cities, increasing penetration of the internet of things devices, and rising need for high-speed broadband services are some of the major factors driving the adoption of FTTH infrastructure. This, in turn, is fueling the demand for passive optical network equipment globally.
The global Passive Optical Network Equipment Market is estimated to be valued at Us$ 22.92 Mn in 2023 and is expected to exhibit a CAGR Of 8.1% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
Growing demand for high-speed internet connectivity and increasing penetration of fiber networks have emerged as key drivers for the market. PON provides a more cost-effective solution for delivering various interactive communication and entertainment services compared to traditional copper networks. The need for faster internet speeds to support cloud services, video streaming, video conferencing, online gaming, and other bandwidth-intensive applications is propelling the deployment of FTTH infrastructure globally. Rising investments in fiber networks by telecom operators to achieve higher network capacity, stronger network connectivity, and better customer experience are also driving the growth of the passive optical network equipment market.
However, high upfront investment required for laying fiber optic cables and deploying equipment may hinder the market growth during the forecast period.
Segment Analysis
The passive optical network equipment market is dominated by the GPON sub segment which holds around 60% share of the overall market. GPON technology offers high speed bandwidth along with better features compared to other technologies like EPON. It has widespread adoption across telecom operators for supporting fiber to the home/building applications.
PEST Analysis
Political: The governments across major economies are supporting investments in digital infrastructure which is promoting fiber to the premises deployments. This is positively impacting the demand for PON equipment.
Economic: Operators are facing capex pressures due to rising connectivity needs. PON solutions help reduce deployment costs for delivering high speed broadband and is seeing increased focus.
Social: With digitalization accelerating across sectors, reliable and high speed home broadband is becoming essential for activities like online education, telemedicine, remote work etc. This is driving the fiberization of networks.
Technological: Advancements in PON technologies have improved speeds and extended the transmission range. Developments like XGS-PON and NG-PON2 are poised to augment the addressable market size for PON deployments.
Key Takeaways
The Global Passive Optical Network Equipment Market Demand is expected to witness high growth over the forecast period of 2023 to 2030 supported by increasing fiber deployments globally. The global passive optical network equipment market is estimated to be valued at US$ 22.92 Mn in 2023 and is expected to exhibit a CAGR of 8.1% over the forecast period 2023 to 2030.
Regional analysis
Asia Pacific currently dominates the market and is expected to maintain its lead position supported by large investments underway for broadband connectivity across major countries like China, India, Japan, South Korea etc. China alone contributes to over 40% of the regional market revenues owing to aggressive FTTH rollouts.
Key players
Key players operating in the passive optical network equipment market are Huawei Technologies Co., Ltd., ZTE Corporation, Calix Inc., ADTRAN Inc., Alcatel-Lucent, Cisco Systems Inc., Ericsson, TE Connectivity, Motorola Solutions, Inc., Nokia, DASAN Zhone Solutions.
Huawei is the current market leader owing to its extensive product portfolio and global customer footprint in carrier networks. ZTE and other Chinese vendors have also gained considerably over the past years backed by strong focus on PON technology development and deployment initiatives within China. Established players like Calix and ADTRAN are expanding their international presence.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.