Optical Transport Network Market Size
| Study Period: | 2018- 2028 |
| Fastest Growing Market: | Asia-Pacific |
| Largest Market: | North America |
| CAGR: | 8.41 % |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Optical Transport Network Market Analysis
The Optical Transport Network Market size is expected to grow from USD 22.98 billion in 2023 to USD 34.41 billion by 2028, at a CAGR of 8.41% during the forecast period (2023-2028).
The rapid increase in internet users at home and work has created a new network bandwidth demand. The increased popularity of online games, social networking, video conferencing, and other real-time streaming activities are expected to drive the demand for the market studied. One of the critical reasons for the optical transport network market's growth is that it delivers seamless data transfer while minimizing latency.
- Further, the continuing expansion of the cloud, the increase of data center capacity, and the quick deployment of 5G are driving network traffic and increasing demand for network capacity, which would significantly create an opportunity for the market studied to grow. For instance, according to Ericsson, 5G subscriptions are expected to increase globally between 2021 and 2025, rising from over 12 million to over 3 billion. Subscriptions are predicted to be highest in Northeast Asia, Southeast Asia, India, Nepal, and Bhutan.
- As cities become digital and smart, communication has become the fifth primary infrastructure network after water, electricity, gas, and transportation. The expansion of digital technologies and industries dictates how smart cities can be. The communications networks that support them have become an essential aspect of how cities may operate and offer services. As a result, more than 150 governments worldwide have announced fiber policies or internet initiatives, promising to make network infrastructure freely available to the public. Governments are providing tax breaks or subsidies to accelerate the construction of backbone networks, enhance network coverage, bridge the digital gap, and boost national economic development.
- For instance, according to the US-China Economic and Security Review Commission, government spending on smart city initiatives in China will reach USD 38.92 billion in 2023. Such developments in smart cities would increase the demand for optical transfer network solutions.
- The high initial investment in network equipment installation and maintenance is projected to hinder the expansion of the global OTN market. Furthermore, modern technologies, including 40G to 100G, can expedite handling data traffic and data transfer; however, these technologies are expensive. The significant capital investment leads to an extended payback period for the investment. Customers frequently give these projects to suppliers at a very low price, although their deployment takes years, notably in the telecom industry. As a result, the significant initial expenditure necessary to establish OTAs is expected to stifle worldwide market development for OTN equipment.
- As mobility limitations were imposed to control the spread of COVID-19, an increasing number of the OECD's estimated 1.3 billion citizens were working and learning from home. Critical international policy coordination, such as the G7 and G20, occurred online through various platforms. Fixed and mobile broadband operators, content and cloud providers, and places where internet networks join to exchange traffic, known as Internet exchange points (IXPs), are seeing up to 60% more Internet traffic than before the outbreak. These variables influenced the optical transport network market during and after the pandemic.
Optical Transport Network Industry Segmentation
An optical transport network (OTN) is a high-capacity network that transports optical signals between several sites. OTN networks are perfect for transporting video, audio, and other types of traffic due to their capacity for enormous volumes of data. Many places, like airports, hospitals, and commercial buildings, employ this network to link various regions worldwide.
The Optical Transport Network Market is segmented by Technology (WDM, DWDM, and Other Technologies), Offering (Service (Network Maintenance & Support, Network Design), Component (Optical Transport, Optical Switch, Optical Platform)), End-user Vertical (IT & Telecom, Healthcare, Government, and Other End-user Verticals), and Geography (North America, Europe, Asia Pacific, the Rest of the World). The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.
| By Technology | |
| WDM | |
| DWDM | |
| Other Technologies |
| By Offering | |||||
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| By End-user Vertical | |
| IT and Telecom | |
| Healthcare | |
| Government | |
| Other End-user Verticals |
| By Geography | |
| North America | |
| Europe | |
| Asia Pacific | |
| Rest of the World |
Optical Transport Network Market Trends
This section covers the major market trends shaping the Optical Transport Network Market according to our research experts:
IT and Telecom Sector to Drive the Market
- The rising demand for bandwidth from residential and commercial consumers is the main motivator for OTN. The increasing need for personal information stored in the cloud, online gaming, online shopping, staying connected over long distances, social networking, video conferencing, and other factors have all contributed to an increase in residential internet use. These applications demand increased network bandwidth from communications and service providers.
- For instance, according to DataReportal, Global internet users have climbed to 4.95 billion at the start of 2022, with internet penetration now standing at 62.5 percent of the world's total population. Moreover, there is approximately 1.134 Trillion MB of data created each day. These numbers themselves project the rising amount of data usage worldwide, which requires fast and reliable data networks like OTN.
- Additionally, according to CloudScene, an independent directory of high-speed internet, data centers, and cloud services, as of January 2022, there were 2,701 data centers in the United States and 487 more in Germany. China had 443 data centers, while the United Kingdom had 456, placing it third among all nations. In total, there were 6,334 data centers worldwide and counting, as new data centers are being constructed rapidly.
- Due to the rise in e-commerce, mobile and internet banking, online government services, industrial automation, Internet of Things (IoT), utility networking, and other related technologies, service providers are facing high-capacity demand from their commercial customers.
- Looking at the increasing pace of internet usage and its application in the IT and Telecommunication industry, the demand for OTN will continue to thrive as the demand for data and the internet increases globally.
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Asia-Pacific to Witness Fastest Growth
- According to Internet World Stats, the population of the Asia-Pacific region is 54.94% of total mankind, with average internet penetration of 64.1% as of June 2021. The two countries that constitute the significant user share in Asia is China and India, with 35.7% and 27.3% of the total internet user in Asia. Thus, these two countries are potential market leaders in the market studied.
- The number of IoT devices in China crossed 2 billion in 2021. It has also unveiled plans for robotics and smart manufacturing by 2025. As per the plan, by 2025, more than 70% of large-scale Chinese enterprises should be digitalized, and more than 500 demonstration manufacturing facilities will be built nationwide. Such a strategic measure is expected to increase the demand and potential growth of OTN solutions in the region.
- With the rapid development of AI, 5G, the internet of things, virtual reality, and the commercial application of these new technologies, the demand for data processing and information interaction is growing, which is expected to speed up the construction of data centers in the region and lead to the explosive growth of the industry. According to Cloud Scene, some of the top markets in data centers include China, Japan, Australia, India, and Singapore.
- Furthermore, in March 2022, Mitsubishi Electric Corporation announced that it would begin shipping samples of its 50Gbps distributed-feedback (DFB) laser diode for optical-fiber communication in fifth-generation (5G) mobile base stations. The novel diode meets all essential optical-transceiver requirements and has an operating temperature range for high-speed, large-capacity data transmission in 5G mobile networks.
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Optical Transport Network Industry Overview
The competitive landscape of the optical transport network market is fragmented because of the presence of a large number of companies. Some key players in this market are Fujitsu, Huawei, Cisco, and ZTE Corporation, among others. The players in this industry are constantly working on developing new product portfolios. They are trying to gain a competitive advantage with mergers and acquisitions, partnerships, and constant innovations.
In July 2022, NEC issued Japan's first sustainability-linked bond with three maturities through a public offering in the domestic corporate bond market. The bond issuance is an example of NEC using financing to demonstrate its commitment to one of its material issues, "environmental action with a particular focus on climate change (decarbonization)." These SDGs-based financing initiatives are the NEC Group's "Purpose" put into action. They allow NEC to dialogue and co-creation with various stakeholders about their sustainability management initiatives.
In June 2022, ZTE Corporation, a prominent global provider of enterprise and consumer technology solutions for mobile internet, created the first commercial Optical Transport Network (OTN) supporting 12THz ultra-wide frequency spectrum in Bursa, Turkey's fourth-largest city, in conjunction with Turkcell. Turkcell chose to build an advanced metro WDM (Wavelength Division Multiplexing) network because 5G networks require several times the capacity of 4G networks to accommodate the massive increase in 5G network traffic.
In June 2022, at the Huawei Optical Innovation Forum, Huawei announced its new vision for optical transport networks. This new vision is centered on delivering the optical transport network (OTN) to edge nodes to provide all-pervasive premium connectivity and construct eco-friendly and straightforward optical networks, assisting operators in achieving financial success.
Optical Transport Network Market Leaders
Nokia Corporation
Ciena Corporation
Cisco Systems Incorporation
Huawei Technologies Co. Ltd
Fujitsu Limited
*Disclaimer: Major Players sorted in no particular order
Optical Transport Network Market News
- December 2022: Huawei introduced several all-optical rail transportation network solutions, including the next-generation urban rail bearer network, urban rail cloud optical network, and railway all-optical backbone network solutions. In response to the network requirements and problems of the urban rail cloud era, Huawei has developed a next-generation urban rail bearer network solution called the urban rail cloud optical network. Cloud-based services use 10G single-wavelength transmission to the control center in a single hop, eliminating intermediate node transmission latency. End-to-end latency is less than 1 millisecond, ensuring a high-quality service experience.
- September 2022: NEC Corporation is driving the expansion of All-Optical Networks with the introduction of its "SpectralWave WX Series," a lineup of open specifications-compliant, available optical transport products. The lineup is based on open ROADM and Telecom Infra Project's (TIP) Phoenix initiative standards.
- June 2022: Infinera and NEC Corporation declared that Neutral Networks' new international neutral fiber optic network NEXT had been equipped with Infinera's ICE6 technology. It was the greatest project of its kind in the region over the past 20 years due to the companies' strong collaboration in designing the most extensive optical network renovation between Mexico and the United States. The NEXT network from Neutral Networks will offer high-capacity services and open the basis for further expansion in the area thanks to Infinera's ICE6 800G coherent technology.
Optical Transport Network Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHT
4.1 Market Overview
4.2 Industry Attractiveness - Porter Five Forces
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of the Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Internet Penetration with Demand for High-speed Internet
5.1.2 Technological Innovations by OTN Solution Providers
5.2 Market Challenges
5.2.1 High Initial Investment
6. MARKET SEGMENTATION
6.1 By Technology
6.1.1 WDM
6.1.2 DWDM
6.1.3 Other Technologies
6.2 By Offering
6.2.1 Service
6.2.1.1 Network Maintenance and Support
6.2.1.2 Network Design
6.2.2 Component
6.2.2.1 Optical Transport
6.2.2.2 Optical Switch
6.2.2.3 Optical Platform
6.3 By End-user Vertical
6.3.1 IT and Telecom
6.3.2 Healthcare
6.3.3 Government
6.3.4 Other End-user Verticals
6.4 By Geography
6.4.1 North America
6.4.2 Europe
6.4.3 Asia Pacific
6.4.4 Rest of the World
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Nokia Corporation
7.1.2 Ciena Corporation
7.1.3 Cisco Systems Incorporation
7.1.4 Huawei Technologies Co. Ltd
7.1.5 ZTE Corporation
7.1.6 Fujitsu Ltd
7.1.7 Infinera Corporation
7.1.8 Telefonaktiebolaget LM Ericsson
7.1.9 NEC Corporation
7.1.10 Yokogawa Electric Corporation
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Optical Transport Network Market Research FAQs
What is the study period of this market?
The Optical Transport Network Market is studied from 2018- 2028.
What is the growth rate of Optical Transport Network Market?
The Optical Transport Network Market is growing at a CAGR of 8.41% over the next 5 years.
What is Optical Transport Network Market size?
The Optical Transport Network Market is expected to reach USD 22.98 billion in 2023 and grow at a CAGR of 8.41% to reach USD 34.41 billion by 2028.
Which region has highest growth rate in Optical Transport Network Market?
Asia-Pacific is growing at the highest CAGR over 2018- 2028.
Which region has largest share in Optical Transport Network Market?
North America holds highest share in 2022.
Who are the key players in Optical Transport Network Market?
Nokia Corporation, Ciena Corporation, Cisco Systems Incorporation, Huawei Technologies Co. Ltd, Fujitsu Limited are the major companies operating in Optical Transport Network Market.
Optical Transport Network Industry Report
Statistics for the 2023 Optical Transport Network market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Optical Transport Network analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
Optical Transport Network Report Snapshots
