July 14, 2024

Growing Adoption of Fiber Connectivity to Boost the Growth of Passive Optical Network Equipment Market

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 22.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Passive optical network equipment consists of fiber optic-based network infrastructure that is used to deliver high-speed broadband, high-definition television (HDTV) and multimedia services to homes and businesses in a cost-effective manner. With passive optical networks, all networking functions are handled in the central office, greatly simplifying the “endpoints” in the field. As communication demands increase, passive optical networking provides bandwidth suitable for supporting future applications. Advantages of passive optical networking include higher efficiency, lower maintenance costs, better security, increased bandwidth, simplified network operations and management. There is growing demand for passive optical networking from telecom operators to strengthen their fiber networks and offer high-speed broadband to both urban and rural areas.

Market key trends:
Growing adoption of fiber connectivity solution and surge in fiber to the home or workplace penetration are major factors driving growth of the passive optical network equipment market. Increasing investments for digital infrastructure modernization especially in developing countries is further fueling the market growth. Furthermore, rising adoption of GPON and XGS-PON technologies across various application domains like residential, commercial, and industrial is creating new opportunities within the passive optical network equipment industry. Ongoing efforts by market players and governments to provide high-speed internet services to underserved areas is also expected to boost adoption of passive optical networking over the forecast period.

Porter’s Analysis
Threat of new entrants: Low economies of scale in the production and high setup costs for new networking equipment pose entry barriers.
Bargaining power of buyers: Large telecom providers have strong bargaining power due to bulk purchases and ability to demand lower prices from networking equipment suppliers.
Bargaining power of suppliers: Well established networking equipment manufacturers like Huawei and Alcatel-Lucent have advantage in pricing negotiations with telecom providers.
Threat of new substitutes: Growth of wireless networking also gaining ground but fiber optic has clear advantages in higher bandwidth and lower maintenance costs.
Competitive rivalry: Intense competition among major networking equipment manufacturers to gain market share through continuous innovation and product differentiation.

Key Takeaways
The Global Passive Optical Network Equipment Market is expected to witness high growth, exhibiting a CAGR of 22% over the forecast period, due to increasing rollout of high-speed fiber networks to meet surging data traffic and broadband demand.

Regional analysis
North America dominates the Passive Optical Network Equipment market currently due to heavy investments by major telecom providers in the US and Canada to upgrade their networking infrastructure. Asia Pacific is poised to be the fastest growing market in the coming years led by massive fiber optic network build outs in China and India.

Key players
Key players operating in the Passive Optical Network Equipment market are Adtran Inc., Huawei Technologies Co. Ltd., Alcatel-Lucent S.A., Hitachi Communication Technologies, Inc., AT & T Inc., Freescale Semiconductor, Inc., Broadcom Corporation, Inc., Ericsson Inc., Calix Inc., and ECI Telecom, Ltd. Adtran and Huawei have established strong global presence while Alcatel-Lucent and Hitachi also have sizable market shares.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it