The Optical Transport Network Market was valued at USD 23.64 billion in 2019 and is expected to reach USD 56.09 billion by 2025, at a CAGR of 15.49% over the forecast period 2020 - 2025. With the advancement in Internet of Things (IoT) and Machine-to-Machine (M2M) communications, there will be a lot of data generated. Hence in return, these will provide a significant growth potential for the optical transport network market.
- Further, the telecommunications industry and service provider networks are rapidly evolving to deal with an explosion of digital traffic driven by multimedia services, mobile applications, social media, VoIP, and cloud computing. Moreover, there is an ever-growing array of bandwidth-hungry applications. Therefore, the explosion of digital traffic will have a positive impact on the optical transport network market.
- In addition to telecommunications, the growing demand for 100Gz system deployment for fast and reliable services and higher bandwidth demand in government organizations as well as in numerous financial companies is expected to encourage the optical transport network market.
- However, on the flip, the initial deployment cost is a major restraint for this market during the forecasted period.
Scope of the Report
Optical Transport Network (OTN) is a protocol that plays a key role in making the network an open and programmable platform, enabling transport to become as important as computing and storage in intelligent data center networking. Today, most of the network traffic is packet-based, generated by a multitude of services and applications in unpredictable traffic patterns, with widely varying and more stringent demands on bandwidth and data transmission performance. Additionally, enterprise companies need high speeds, reliability, and high uptime for data processing and other tedious processing applications. Hence, they are constantly in search of optimal network solutions. To avoid losses, owing to system failures, companies rely on high-speed optical transport networks.
Key Market Trends
IT and Telecom Industry to Drive the Optical Transport Network Market
- The wireless infrastructure market is evolving at a higher rate and thus the 5G is also evolving. 5G mobile network technologies offer the potential of 30 to 50 times faster speeds than 4G.
- Cisco forecasted that by the average smartphone will generate 11 GB of traffic per month by 2022, which is more than a four and a half-fold increase over the 2017 average of 2 GB per month. The increase in mobile traffic will create a huge opportunity for optical transport network market.
- Further, the performance improvements offered by 5G are considered a key element in the expansion of the Internet of Things. Entirely new applications including virtual/augmented reality and autonomous vehicle management will require the speed and reliability promised by 5G.
- Moreover, the emerging cloud architecture with its software-centric network paradigm also presents opportunities for telecom vendors and service providers to evolve innovative products and services that can contribute to the overall growth of the global telecom industry.
- Together these changes will put greater demands on the mobile data transport network and have a positive impact on the optical network architecture to better accommodate these requirements.
Asia-Pacific to Witness the Fastest CAGR
- Asia-Pacific is becoming a manufacturing hub for most of the companies due to the presence of cheap labors and high penetration rate of Industry 4.0 movement. This is supported by the governments in Asian countries who are very involved in helping new industries develop proactively support this development. For example, "Made in China 2025" is an initiative to comprehensively upgrade Chinese industry to enable the realization of Industry 4.0.
- According to the Economist Intelligence Unit (EIU), people's living in Asia are strongly based on technology and it has penetrated all aspects of their daily activities far more deeply than in many other parts of the world. Such penetration will drive the telecom providers to provide higher network connection speeds which in return will encourage the optical transport network market to expand.
- Therefore, the above factors are expected to contribute to the growth of optical transport network market in Asia-Pacific at a fastest growth compared to other regions.
The competitive landscape of optical transport network market is fragmented because of the presence of a large number of companies. Some of the key players of this market are Fujitsu, Huawei, Cisco, ZTE Corporation, etc. among others. The players in this industry are constantly working on developing new product portfolio to gain competitive advantages with mergers and acquisitions, partnership, and constant innovations.
- January 2019 - Infinera expanded its portfolio of metro packet-optical solutions with the introduction of the Infinera 7100 PSX-3S platform. This enabled cost-effective access and aggregation of diverse metro traffic types, including high-speed Ethernet and 10 gigabits per second (Gb/s) and 100 Gb/s wavelength-division multiplexing (WDM).
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