PASSIVE OPTICAL COMPONENT MARKET ANALYSIS

Global passive optical component market growth can be hampered due to high installation costs associated with setting up passive optical networks. Laying down fiber optic cables and installing other passive infrastructure requires extensive trenching works. This involves heavy earthmoving equipment and labor intensive work. Especially in developed economies where existing telecommunications lines and underground utility networks are highly congested, any new fiber laying requires careful planning and coordination between various stakeholders. This significantly drives up the costs of initial deployment and expansion of passive optical networks. High upfront capital expenditures pose a major deterrent for networking service providers to aggressively rollout fiber connections. Cost effective installation techniques and streamlined regulatory clearances can help address this challenge and promote faster adoption of fiber networks.

Market Opportunity: Expansion of 5G networks and related infrastructure

The rollout of 5G cellular networks around the world presents a massive opportunity for the global passive optical component market. 5G architecture relies on establishing a large number of compact cellular base stations or small cells which need to be densely deployed and connected with high bandwidth backhaul infrastructure. This provides an impetus for networking service providers to lay down more fiber optic cables and expand passive optical networks in order to carry exponentially higher data traffic from 5G. It is estimated that 5G deployment may require increasing the number of base station sites by 10 to 100 times compared to existing 4G networks. To support such dense small cell infrastructure, robust fiber connectivity comprising of various passive optical components such as optical cables, splitters and plug-in connectors will witness huge demand. As majority of countries have started rolling out their 5G roadmaps, it can boost revenue for passive optical component suppliers in the future.