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The optical transport network (OTN) equipment market size is forecast to increase by USD 5.54 billion at a CAGR of 3.91% between 2023 and 2028. The growth rate of the market depends on several factors such as the growing demand for high-speed data transmission and proliferation of bandwidth-intensive applications, the increase in the number of data centers, and the growing mobile data traffic.
The report includes a comprehensive outlook on the Optical Transport Network Equipment Market, offering forecasts for the industry segmented by Technology, which comprises WDM, and SONET/SDH. Additionally, it categorizes End-user into communication service providers, enterprises, public sector, and others, and covers Regions, including North America, APAC, Europe, South America, and Middle East and Africa. The report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
Optical Transport Network Equipment Market Forecast 2024-2028
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The global smartphone market has been seeing massive growth since 2010. The major reasons for the growth of data traffic include increasing Internet penetration, growing popularity and increasing use of social networking platforms, growth of digital music streaming services, increasing demand for IoT devices, increasing investments in smart cities, and the implementation of artificial intelligence (AI)
Furthermore, to ensure efficient and effective fiber-optic backhaul transferred to all-fiber metropolitan, long-haul, regional, and submarine networks, which connect cities, countries, and continents, optical fiber infrastructure connects to cell towers. Because cellular networks will experience an increase in mobile data, which calls for effective fiber-optic network infrastructure, the demand for optical transport networks and the related hardware will, therefore, increase during the forecast period as a result of the increased usage of smartphones and tablets.
One of the key areas where AI and ML are being integrated into optical transport network equipment is network optimization and automation. By leveraging AI and ML, optical transport network equipment can autonomously adapt to changing traffic conditions, allocate bandwidth more efficiently, and proactively mitigate network congestion or performance issues. Another critical application of AI and ML in optical transport network equipment is predictive maintenance and fault detection.
Moreover, AI and ML technologies are instrumental in enabling cognitive networking capabilities within optical transport network equipment. Cognitive networking leverages AI-driven insights to make real-time, context-aware decisions. Thus, such factors are expected to increase the demand for optical transport network equipment, which will propel the growth of the global optical transport network equipment market during the forecast period.
Single carrier networks using equipment from a single vendor did not face any issues of standardization. However, the growth, expansion, and interconnection of networks gave rise to issues regarding standardization. The lack of set standards made WDM more of a liability. The lack of a common mapping structure forced carriers to de-multiplex the client traffic into the lowest form at the carrier boundaries. For instance, the lack of standard fault detection and alarm indication means that faults cannot be communicated to the other portions of the network or over carrier boundaries.
Moreover, the lack of standard methods will make consumers complain about poor-quality signals, and the carriers will not know the fault. These concerns are extremely problematic when it comes to the functioning of a network and the sale of mission-critical services. Thus, the lack of optical transport network standards is expected to adversely affect the adoption of optical transport network equipment during the forecast period.
The WDM segment will account for a major share of the market's growth during the forecast period.?The WDM segment is expected to grow significantly due to the significant investments of China in the development of broadband infrastructure, with a focus on 100G fiber-optic Internet connections. Furthermore, the demand for WDM equipment for 200 Gbps networks is expected to grow during the forecast period. The demand for flexible modulation line cards, which are capable of an optical transmission at 100 Gbps or higher, is also expected to rise during the latter part of the forecast period.
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The WDM segment was valued at USD 19.65 billion in 2018. Furthermore, metro WDM is the key segment that will mostly be application-driven. The service upgrading to higher network speeds of 200 Gbps and 400 Gbps, the replacement of legacy systems to accommodate higher broadband speeds, and interconnecting enterprise data centers will increase the demand for WDM, which will propel the growth of the WDM segment in the global optical transport network equipment market during the forecast period.
Based on end-user, the market has been segmented into communication service providers, enterprises, the public sector, and others. The communication service providers segment will account for the largest share of this segment.? The networks used by communication service providers are designed only to support a few features and will not be able to meet the data bandwidth and traffic demand. In addition, a significant rise in Internet traffic will increase the requirements for large bandwidths. Some of the main reasons for the increase in Internet traffic include streaming media and video conferencing. As a result, there might be several data streams passing simultaneously through the Internet connection, which increases Internet traffic. These increasing requirements for high bandwidths will fuel the demand for optical transport network equipment in communication service providers, which will propel the growth of the communication service providers segment of the optical transport network (OTN) equipment market during the forecast period.
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North America is estimated to contribute 36% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the optical transport network equipment market growth analysis during the forecast period. In North America, the communications industry is booming because of the use of the Internet for purposes such as online gaming, social media, video chatting, and online shopping. This has created a high requirement for bandwidth from the metros and urban cities. Moreover, the use of bandwidth in finance, media, and automation has been significantly enhanced. The advent of the IoT will further propel the demand for seamless data transmission, which requires high bandwidth. All these factors are expected to enhance the adoption and need for optical transport networks, which will create demand and drive the growth of optical transport network equipment market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
ADVA Optical Networking SE, Aliathon Technology, Ciena Corp., Cisco Systems Inc., Deutsche Telekom AG, Ekinops SA, FiberHome Telecommunication Technologies Co. Ltd., Fujitsu Ltd., Huawei Technologies Co. Ltd., Infinera Corp., Juniper Networks Inc., Mitsubishi Electric Corp., NEC Corp., Padtec Holding S.A., Ribbon Communications Inc., Tejas Network Ltd., Telefonaktiebolaget LM Ericsson, Yokogawa Electric Corp., and ZTE Corp.
Technavio optical transport network equipment market research report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The optical transport network equipment market analysis and report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Optical Transport Network Equipment Market Scope |
|
Report Coverage |
Details |
Page number |
175 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.91% |
Market Growth 2024-2028 |
USD 5.54 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.58 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 36% |
Key countries |
US, China, India, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adtran Holdings Inc., ADVA Optical Networking SE, Aliathon Technology, Ciena Corp., Cisco Systems Inc., Deutsche Telekom AG, Ekinops SA, FiberHome Telecommunication Technologies Co. Ltd., Fujitsu Ltd., Huawei Technologies Co. Ltd., Infinera Corp., Juniper Networks Inc., Mitsubishi Electric Corp., NEC Corp., Padtec Holding S.A., Ribbon Communications Inc., Tejas Network Ltd., Telefonaktiebolaget LM Ericsson, Yokogawa Electric Corp., and ZTE Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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