PASSIVE OPTICAL NETWORK EQUIPMENT MARKET ANALYSIS

Passive Optical Network Equipment Market Size and Trends

The global passive optical network equipment market is estimated to be valued at US$ 14.75 Bn in 2024 and is expected to reach US$ 37.59 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 14.3% from 2024 to 2031. Passive optical network equipment helps telecom operators provide fiber to the home or building connectivity with advantages of high bandwidth, low latency, and no need for regular maintenance of active equipment.

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The market is expected to grow steadily driven by increasing investments by telecom operators in fiber infrastructure to support the increasing demand for high speed broadband. 5G deployments will further augment the demand for fiber connectivity. Deployments are expected to be high in regions with initiatives for digital infrastructure. Adoption across industries for applications like video surveillance and enterprise connectivity will further support the market growth during the forecast period.

Rising demand for high-speed broadband services

The mass digitization of content and the growing popularity of video and cloud-based applications has led to a surge in demand for high-speed broadband services across both residential and business sectors globally. As more people work, communicate, stream media and access various online services from home, there is an increasing need for internet connections that can support these bandwidth-intensive activities. At the same time, enterprises are heavily relying on internet infrastructure to drive their digital transformation strategies and improve connectivity within their offices and campuses. This rising demand for high-speed, low-latency connectivity puts tremendous pressure on existing network infrastructure and makes operators look for scalable, future-proof fiber technologies.

Passive optical networks have emerged as an attractive solution as they can deliver symmetrical gigabit bandwidth through fiber all the way to the user premises in a highly scalable manner. Passive Optical Network equipment allows internet service providers to expand coverage, increase capacities and offer premium broadband and connectivity services to residential as well as business customers. Major telecom companies are making sizeable investments to upgrade their access networks with fiber and Passive Optical Network with a goal to roll out internet speeds well over 1 Gbps. Governments across countries have also initiated several programs to enhance broadband access through fiber in both urban and rural regions. All these factors are fueling strong growth in the adoption of PON solutions worldwide.

For instance, in May 2020, Iskratel, a leading European provider of communications solutions for the digital transformation of telecommunications, transportation, public safety, and energy industries announced the deployment of Gigabit Passive Optical Network equipment as part of the RUNE (Rural Network) project, aiming to develop an ultra-fast fibre-optic broadband network across 210 municipalities. This three-year initiative will provide high-speed internet access to 233,000 people, with speeds reaching up to 10 Gbit/s.

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Growing optical fiber deployments

Another key driver for the increasing demand of PON equipment is the rising optical fiber deployments by telecom operators and internet service providers. With network usages and bandwidth consumption growing exponentially, there is a pressing need to shift to fiber-based infrastructure from legacy copper networks which have limited capacities. Fiber broadband enables symmetrical speeds and lower latency compared to other broadband technologies. It also future-proofs the networks to support new technologies such as 5G, Internet of things, Artificial Intelligence (AI), and emerging applications for many years to come. Realizing the long-term benefits of fiber, many nations have launched countrywide fiberization projects with an objective to make high-speed broadband internet as universal and ubiquitous as electricity.

Telecom carriers are aggressively fiberizing their access networks by replacing old telephone wires and cables with state-of-the-art optical fiber connections. At the same time, new fiber network builds are also underway in underserved and unserved communities.