Optical Communication and Networking Market Size Forecast to Reach $32.80 Billion by 2026

The Market for Optical Communication and Networking is forecast to reach $32.80 billion by 2026, growing at a CAGR of 6.2% from 2021 to 2026. The Optical Communication and Networking Market is estimated to witness a sustainable growth over the forecast period majorly because of the distinctive features offered such as large quantities of data transmission, high bandwidth, quick transmission to the end users. Optical Networking is basically a communication network used for the exchange of information through optical fibre cables between the transmitter and the receiver. It is one of the quickest networks used for data communication because data signals through an optical fibre are transmitted in the form of light pulses. Transmission of data signals is much easier in form of light pulses than fibre cables, this drives optical networking growth among other networking mediums. However, high installation costs and threat of leakage of data signals which can be reduced by installing data shields which further increase the overall costs are some of the factors which restrain the market growth of Optical Communication and Networking globally.

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Optical Communication and Networking Market Segment Analysis - By Elements

Topology has dominated the Optical Communication and Networking Market as compared to the other elements. The topology element consists of transmission line and their networks where optical fibre has the largest usage. Topology is the arrangement of multiple optical fibre transmission lines in an optical network. These are broadly classified into four types. They are Bus Topology, Ring Topology, Star Topology and Mesh Topology. All of these categories work and transmits data from senders end to receivers end differently on the basis of their transmitting structure. The main transmitting property of Optical Fibres is offered in network topology element. Among this, single-mode fibre category is widely used by end users.

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Optical Communication and Networking Market Segment Analysis - By End Use Industry

Optical Communication and Networking Market is widely used in Telecommunication sector. One of the major reasons for boost in market of Optical Communication and Networking in Telecommunication sector is ongoing demands by telecom industries such as large quantities of data transmission, high bandwidth, quick transmission and others. These demands boost the developments of Optical Networking market players so that they can provide additional features such as low capital and operational costs. Optical Communication and Networking simplifies service provisioning, supports a wide range of new and high-bandwidth applications, improves manageability, scalability, and efficiency. This enhances the market growth at Optical Communication and Networking Market in Telecom Industries widely.

Optical Communication and Networking Market Segment Analysis - By Geography

Asia-Pacific accounts for being the highest market among all the regions by geography. The market growth in this region is predominantly rising due to fast-growing economies such as China, India, Japan and Others. According to Indian Brand Equity Foundation (IBEF), India is the world’s second-largest telecommunications market with a subscriber base of 1.16 billion and has registered strong growth in the last decade. Fulfilling the demands of users such as a high adoption rate of wireless communication and advancements in the IoT (Internet of Things) field are resulting in the rising demand for fibre optic cables in the region. Moreover, the presence of large market players, such as Fujikura Ltd. and Furukawa Electric Co. Ltd., offering optical fibres, electric fibre cables, and other optical network components uplifts the market growth of Optical Networking and Communication. In addition, several countries, such as India, China, and South Korea, are expected to increase the installation of fibre-to-the-home (FTTH) solutions for vast data broadcasting which promotes the use of Optical Networking Systems. This increases the demand of Optical Communication and Networking Market.

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Optical Communication and Networking Market Drivers

Rise in Industrialization and Technology Advancement drives market growth

Fast growing economies in Asia-Pacific are contributing considerably in the Optical Communication and Networking Market. Rise in industrialization in these economies tends to uplift the network traffic which is expected to grow exponentially in the forecast period. With the emerging technology advancements such as cloud services, video streaming, 4G/5G mobile technologies, and the Internet of Things, the pressure on the core network is multiplied. With recent advancements such as silicon photonic integration and spatial-division multiplexing (SDM), optical communications and networking technologies demonstrated great success in supporting the growth of data centre networks. Moreover, the implementation of software defined networking (SDN) is making optical communication networks comprising both fibre optic systems and optical wireless systems more agile, programmable and offers flexible service solutions. These developments enhance the growth of Optical Communication and Networking Market.

Smart City Developments

The Government initiatives to build Smart Cities in major parts of the countries tends to promote the Optical Networking and Communication Market. The goal to provide large quantities of data transmission, high bandwidth, quick transmission to the end users at every industrial sector tends to drive the market growth. Communications is the central focus of smart cities. Communications among city departments and organizations, within the city for residents and visitors and links to the outside world via data (Internet), voice (landline and cellular) and video entertainment (CATV and OTT), this can be achieved by Optical Communication and Networking. These facilities provided by Optical Communication and Networking in Smart Cities tends to drive the market growth in global market.

Optical Communication and Networking Market Challenges

High Installation cost and Impact of Covid-19

One of the major challenges faced by Optical Communication and Networking Market globally is the high installation cost of Optical Fibre Cables. Increase in end users demand and machine-to-machine network traffic are creating big challenges for optical communications to continue working at large scale cost-effectively. For meeting those demands of the end users, it requires new technological advancements to form an optical networking system working parallelly with the current technology at affordable installation cost. Ongoing demands to achieve a goal of Next-Generation Network (NGN) requires high installation costs. The current pandemic situation of Covid-19 also hinders the market growth globally as majority of market players are not able install these optical fibre cables as there is suspension of construction activities in various industries. This has brought a major challenge in the market growth of Optical Communication and Networking globally.

Optical Communication and Networking Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Optical Communication and Networking Market. The Optical Communication and Networking Market is dominated by major companies such as Adtran, Adva, Arista, Broadcom, Cisco, Coriant, Corning, EciTelecom, Ericsson, Fujitsu Optical Component, Huawei, Juniper, Lumentum, Mitsubishi Electric and Neophotonics.

Acquisitions/Technology Launches/Partnerships

In October 09, 2020 Fujitsu Optical Components Limited (FOC) announced their new product, a 400G ZR+ transceiver that enables coherent WDM transmission greater than 120km in the same form factors (QSFP56-DD and OSFP) as its 400G ZR transceiver. Both transceivers use advanced coherent technology to enable higher bandwidth capacity and lower cost per bit compared to existing 100G WDM technology.

In March 03, 2020 Ribbon Communications Inc., a global software leader in secure and intelligent cloud communications, completed its previously announced acquisition of ECI Telecom Group Ltd. (ECI), a global provider of end-to-end packet-optical transport and SDN/NFV solutions for service providers, enterprises, and data center operators.

Key Takeaways

The Optical Communication and Networking Market is estimated to witness a sustainable growth over the forecast period because it offers many benefits to the organizations such as low capital and operational costs.

Optical Communication and Networking simplifies service provisioning, supports a wide range of new and high-bandwidth applications, improves manageability, scalability, and efficiency.

Optical Communication Systems also help to overcome distance limitations which promote their growth for data transfer and broadcasting in long channels over a large geographical area.

An optical networking system provides expansion of data in large scale, offering service flexibility and resiliency. It also reduces the need to maintain multiple wide area networks. In addition, it can help organizations meet end user’s demands and continues growth objectives, which requires a highly available network infrastructure. This promotes and uplift market growth.

With the growing demand of technology and ongoing industrialization, quick data accessibility for data broadcasting, Optical networking and Communication Market tends to develop at a faster rate. These demands boost the market growth.

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