Market Snapshot
| Study Period: | 2019- 2026 |
| Base Year: | 2020 |
| Fastest Growing Market: | Asia Pacific |
| Largest Market: | North America |
| CAGR: | 15.49 % |
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Market Overview
The Optical Transport Network Market was valued at USD 23.64 billion in 2020 and is expected to reach USD 56.09 billion by 2026, at a CAGR of 15.49% over the forecast period 2021 - 2026. With the advancements in the Internet of Things (IoT) and Machine-to-Machine (M2M) communications, a substantial amount of data is expected to be generated. Hence in return, this will provide significant growth potential for the optical transport network market.
- The telecommunications industry and service provider networks are rapidly evolving to deal with the explosion of digital traffic driven by multimedia services, mobile applications, social media, VoIP, and cloud computing. Also, 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 100 Gz system deployment for fast and reliable services and higher bandwidth demand in government organizations as well as in numerous financial companies are expected to encourage the optical transport network market.
- 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.
- The spread of the COVID-19 pandemic resulted in a major supply chain disruption, which is disrupted the 5G buildout process in the short & medium term. The major 5G hardware delays and general effects of the economic slowdown affected the market significantly. But in the longer term, the escalating needs for digital health, home connectivity, and even economic stimulus measures are expected to give 5G buildout a boost.
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. Enterprise companies also need high speeds, reliability, and 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.
| 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 |
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 as a result, 5G is also evolving. 5G mobile network technologies offer the potential of 30 to 50 times faster speeds than 4G.
- Cisco forecast that the average smartphone will generate 11 GB 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 the 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 and develop innovative products and services that can contribute to the overall growth of the global telecom industry.
- Together, these changes will put a greater demand on the mobile data transport network and positively impact the optical network architecture to accommodate these requirements better.
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Asia Pacific to Witness the Fastest CAGR
- The Asia Pacific is becoming a manufacturing hub for most companies due to the presence of cheap labor and the high penetration rate of the Industry 4.0 movement. In Asian countries, governments proactively support the development of new industries. For example, “Made in China 2025” is an initiative to comprehensively upgrade the Chinese industry to enable the realization of Industry 4.0.
- According to the Economist Intelligence Unit (EIU), people living in Asia strongly support 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 turn, will encourage the optical transport network market to expand.
- Therefore, the above factors are expected to contribute to the growth of the optical transport network market in Asia-Pacific, which is expected to witness the fastest CAGR compared to other regions.
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Competitive Landscape
The competitive landscape of the 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, 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.
- May 2021: Nokia was selected by Swisscom in order to transform the operator’s existing infrastructure, primarily to a fully automated and higher capacity optical transport network. The company became the sole supplier to build this end-to-end wavelength division multiplexing/optical transport network nationwide, which will majorly support Swisscom customers.
- April 2021: Tata Communications and Bahrain Internet Exchange (BIX), its exclusive cable landing partner in Bahrain, announced that they had extended their partnership to enable a next-generation Optical Transport Network (OTN) network for the country.
Recent Developments
- March 2021: latest updates to the ITU G.709 series were aimed to enhance the optical transport network (OTN) with newer capabilities that includes an option for stronger forward error correction (FEC) for long-reach interfaces and additional security functionality for short-reach interfaces. This revision to ITU G.709.3/Y.1331.3 Flexible OTN long-reach interfaces primarily adds a stronger FEC option for 100, 200, and 400 Gbit/s Flexible OTN (FlexO) 450km-reach interfaces.
- October 2020: Acacia Communications Inc., a major provider of high-speed coherent optical interconnect products, announced that it is sampling a new 100G coherent DWDM pluggable solution to help service providers, carriers, and cable operators meet growing bandwidth requirements in edge and access networks.
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's Five Forces Analysis
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
4.3.1 Introduction to Market Drivers and Restraints
4.4 Assessment of Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Internet Penetration with the Demand for High-speed Internet
5.1.2 Technological Innovations by OTN Solution Providers
5.2 Market Challenges
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
*List Not Exhaustive8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Optical Transport Network Market market is studied from 2019 - 2026.
What is the growth rate of Optical Transport Network Market?
The Optical Transport Network Market is growing at a CAGR of 15.49% over the next 5 years.
Which region has highest growth rate in Optical Transport Network Market?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Optical Transport Network Market?
North America holds highest share in 2020.
Who are the key players in Optical Transport Network Market?
Cisco Systems Inc., Huawei Technologies Co. Ltd, Fujitsu Ltd, Infinera Corporation, Ericsson are the major companies operating in Optical Transport Network Market.
