Passive Optical Network (PON): Building A Next-Generation Optical Access Network

Market Overview

The global Passive Optical Network (PON) market was estimated at USD 5.83 Billion in 2015 and is expected to witness enormous growth over the forecast period. Increasing demand for digitization and secure and reliable network operation is expected to drive the market growth.

Growing requirement for faster network and increasing expansion in the network technologies is further anticipated to augment the industry growth. Furthermore, increasing demand for optimized bandwidth connectivity and growing penetration of internet and telecom services will boost the industry growth over the forecast period. This will further enhance the gigabyte PON technology in the industry.

Few other factors responsible for the technology growth in the market include increased fiber to the home (FTTH) requirements, high return on investments, rising growth in IP traffic, and low cost of ownership. The technology helps in reducing the operating expenses since it requires less installation time, with higher reliability and also help the telecom companies for faster voice, data and other services.

Growing FTTH deployments for faster access to videos, voice and other services and increasing demand high-speed network for accessing smart systems at home is also projected to enhance the market growth. Furthermore, the increasing penetration of e-governance service, smart grids, and cloud computing will fuel the industry growth over the forecast period.

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Key Players:

Key competitors include:

• Freescale Semiconductor
• Mitsubishi Electric Corporation
• Adtran Inc.
• Ericsson Inc.
• Verizon Communications, Inc.
• Huawei Technologies Co.

The key players adopt various strategies to maintain the position in the industry. The strategies include partnership & collaboration, product launch, acquisition, R&D and expansion. Merger & acquisition is considered to be one of the most adopted strategies amongst the players which further help in expanding the market share.

Rising data traffic has led to the upgradation in technology structure for enabling higher capabilities and is expected to driving the market. Furthermore, the presence of robust optical network setup and rising demand for conservation of energy are projected to fuel the market growth. Increasing investments in R&D from both the public and private entities for improving the efficiency and connectivity will also enhance the market growth.

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Market Segments:

The market is categorized into structure, component and application.

• Based on the structure, PON is segregated into Gigabyte Passive Optical Network (GPON), Ethernet Passive Optical Network (EPON) and Wavelength Division Multiplexing Passive Optical Network (WDM-PON). GPON is estimated to hold the share of over 60% of the market in 2015 and is expected to witness steady growth over the forecast period. GPON utilizes the encapsulation method and a single fiber can be used for downstream and upstream data.
• Based on the component, the industry is segregated into Optical Line Terminal (OLT) and Optical Network Terminal (ONT). ONT is further categorized into Optical Network Unit (ONU) and splitters. ONT is accounted for major share in the market and is also expected to witness enormous growth over the forecast period. ONT is placed at the end-user premises and while OLT is placed at the central site of the service provider.
• The PON market application is segregated into Fiber to the x (FTTx), mobile backhaul. FTTX is further categorized to Fiber to the home (FTTH), Fiber to the building (FTTB), and Fiber to the cabinet/curb (FTTC). FTTx is used for broadband network architecture for optical fiber deployment. FTTH applications is attaining major share within telecommunication operators and is projected to boost the industry growth.

Regional Analysis

Europe region is estimated to contribute significantly owing to increasing investments from government, and rising demand for passive optical network equipment is further projected to enhance the market growth. Asia Pacific region is also expected to witness significant growth over the forecast period. The factors attributing growth of the region include increasing number of internet users, rapid network implementations in India and China, and increasing demand for greater bandwidth in the emerging economies such as Japan, India and China.

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