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Global Passive Optical Network Equipment Market: Rising Digitization in Emerging Regions to Ensure Steady Growth, says TMR

Posted on Nov 23, 2016

The global passive optical network (PON) equipment market exhibits a high degree of consolidation, with Huawei Technologies Co. Ltd., Alcatel-Lucent S.A., ZTE Corporation, and Calix Inc. collectively accounting for more than 80% of the market’s overall revenue in 2014. These companies are likely to retain their dominance in the PON equipment market in the coming years, with many market players aiming to maximize the opportunity in emerging regions such as Asia Pacific. 

The global passive optical network equipment market is expected to reach a valuation of US$163.5 bn by the end of 2023, exhibiting a robust 20.7% CAGR between 2015 and 2023.

GPON to Retain Clear Dominance over EPON Equipment

By structure, the global passive optical network equipment market is segmented into gigabit (GPON) and Ethernet passive optical networks (EPON). Of these, GPON equipment is likely to remain the leading contributor to the global passive optical network equipment market in the coming years, with the segment’s market share expected to reach 70.24% by the end of 2023. 

However, the use of Ethernet passive optical networks is rising due to the growing demand for 3G and 4G telecommunications protocols. The steady development of telecommunications technology in recent years has made Ethernet passive optical networks compatible with modern Ethernet standards. This removes the need for speed adjustments in an active connection. This is likely to ensure steady demand for Ethernet passive optical network equipment in the coming years in spite of the clear dominance of gigabit passive optical network equipment.

Geographically, Asia Pacific is likely to remain the leading contributor to the global passive optical network equipment market in the coming years. Despite the easier implementation of advanced passive optical network equipment in developed regions, the high volume of data being generated in dynamic emerging countries such as India and China is likely to ensure rapid growth of the PON equipment market in Asia Pacific in the coming years.

Rising Digitization in Emerging Regions to Ensure Steady Growth of PON Equipment Market 

The prime driver for the global passive optical network equipment market is the rising demand for digitization in various industries. This is a particularly notable driver for the market in emerging markets, as many industries in developed countries already have digitized their operations. The rising disposable income of consumers in regions such as Asia Pacific has also led to increasing use of modern smartphones and tablets, further driving the generation of digital data in the region. This is likely to remain a key driver for the Asia Pacific passive optical network market in the coming years, as the rapid urbanization and industrialization in countries such as India, China, Thailand, South Korea, Taiwan, Japan, and Indonesia is likely to boost the implementation of digitalization solutions.

The reliability offered by passive optical network hardware, especially in contrast to many wireless connectivity technologies, is a key factor driving its demand. PON equipment also helps improve the security of the network, which has become an influential factor in the field of computing due to the rising awareness about the threat of cyber-crime.

On the other hand, the high installation and operating costs of passive optical network equipment is likely to constrain its demand. Even though passive optical networks provide a secure return on investment, its slow pace has forced many players to opt for alternatives. Many users in developing countries have been able to prioritize the long-term benefits of passive optical network equipment, but its high costs are likely to hamper the market’s growth potential in emerging regions in the coming years.

The information in this preview comes from a Transparency Market Research report titled ‘Passive Optical Network (PON) Equipment Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2015 - 2023.’

The global passive optical network equipment market is segmented as follows:

Global passive optical network (PON) equipment market: by components

  • Optical cables
  • Optical power splitters
  • Optical filters
  • Wavelength division multiplexer/de-multiplexer

Global passive optical network (PON) equipment market: by structure

  • Gigabit passive optical network (GPON)
  • Ethernet passive optical network (EPON)

Global passive optical network (PON) equipment market: by geography

  • North America
  • Europe
  • Asia Pacific
  • Rest of the World

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