Passive Optical Network Equipment Market - Grow at a CAGR of 15.7% During the Forecast Period from 2014 to 2020

Passive optical network (PON) is a telecommunication network that enables connection from one point to multiple points. PON is a fiber to home/premises (FFTH/FFTP) network which serves numerous connections through a single optical fiber and unpowered optical splitters.

Optical fiber splitters ensure energy-efficiency in PON because it does not require electricity for signal transmission. The split ratio of PON depends on its usage in terms of its structure such as Gigabit passive optical network (GPON) or Ethernet passive optical network (EPON).

PON is more environment-friendly than traditional copper-based Ethernet local area network. The usage of workgroup switches is eliminated by passive optical local area network (POL).

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This, in turn, eradicates the consumption of thousands of KW energy and thus acts as a more cost-effective option. Furthermore, PON reduces the usage of non-renewable electrical equipment and lowers power consumption. The traditional copper-based network provides 100/1000base Ethernet connectivity to desktop devices such as desktop computers, voice over IP phones, laptops, and video phones to work group terminal (WGT).

Passive optical network uses a single fiber, single type optic to the WGT, and small passive optical splitters. Therefore, PON does not produce heat, does not require power, and can even be mounted in electrical closets. Furthermore, ability of these systems to save fire load makes them environment friendly. Considering all these factors, the impact of this factor is analyzed to be high currently and is anticipated to remain high during the forecast period.

PONs provides easy installation and maintenance vis-à-vis traditional networks, which makes its operations much more simplified. PON minimizes the network’s downtime during upgrade and expansion by using the existing fiber optic cable and only replacing the electronics, rather than changing the entire infrastructure.

Furthermore, optical fibers used in PON are made up of dielectric material and thus electromagnetic radiations are not produced. Therefore, information or data remains secure during operation of PON. Components required by PON are wide area network (WAN) router, Ethernet aggregation switch (EAS), core router/switch, work group terminals (WGT), and fiber and passive optical splitters.

PONs does not encounter multi-wired chaotic closets due to their inbuilt capabilities, which makes its operations hassle-free. Considering all these factors, the impact of this factor is analyzed to be medium currently and is expected to become high during the forecast period.

The major driving factors of the passive optical network equipment market in India are the high return on investments and low cost of ownership. In addition, unmatched security, higher bandwidth and greater reliability are set to bolster the growth of PON market in India.

Moreover, simplified network operations, eco-friendly solutions and scalability are acting as the driving force for this market. It is also to be duly noted that high initial investments coupled with high component cost at operator’s interface and huge research and development costs is set to discourage start-ups and other mid-sized firms in entering into the India passive network equipment market, thus behaving as a restraint.

The opportunities in this market are the need for higher bandwidth and rising demand for passive optical network in India.

Gigabit passive optical network (GPON) equipment is expected to generate larger revenue as compared to its counterpart - Ethernet passive network (EPON). Higher bandwidth allocation and low power consumption are significant features offered by GPON that has made it superior in terms of technology, compared to EPON.

In addition, less number of active switching devices used in the network and advanced security is additional advantages provided by the GPON equipment. Thus, GPON is expected to witness significant growth rate over the forecast period from 2014 to 2020.

GPON optical network terminals (ONTs) accounted for majority market share in the year 2013 owing to the growth in gigabit passive optical network. As ONTs are components located at the subscribers end, the number of subscriber is similar to the number of ONT’s. GPON’s efficient and advanced networking technology has driven the demands for its components: ONT and OLT.

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