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Passive Optical Network [PON] Market Share & Growth, 2032

The global Passive Optical Network (PON) market size was valued at USD 13.76 billion in 2023. The market is projected to grow from USD 15.54 billion in 2024 to USD 48.18 billion by 2032, exhibiting a CAGR of 15.2% during the forecast period.

A Passive Optical Network (PON) is a last-mile technology used by telecommunication companies and internet service providers to provide high-speed internet with low latency to end users. The product has also evolved from basic Ethernet (EPON) to Gigabyte (GPON) and the presently available Next-Gen PON. Generally, PON system architecture consists of major components such as an Optical Line Terminal (OLT), Optical Network Terminal (ONT), and Optical Distribution Network (ODN). Additionally, expanding internet accessibility and globally spreading fibre networks have bolstered their application in (Fiber to the X location (FTTX)) and mobile Xhaul, which is growing the market progressively. 

The global market witnessed progressive growth during the pandemic due to growing internet penetration, focused policies, investments, and international infrastructure development by the governments. Furthermore, the adoption of PON equipment among internet service providers is a prime factor cementing the market’s growth during the forecast period. The growing demand for secure, fast, and reliable network connectivity endorses consumers’ network PON equipment demand. However, residual players’ diverse product offerings and substitute technologically advanced products are possible factors causing hindrances to the market. At the same time, low ownership costs and high returns on PON devices have solidified the diverse applications of this technology in cyber security and data centres that enhance security data-level security to provide leveraging opportunities. In addition, the government’s infrastructure-centric policies and network development investments are expected to increase the market size of Passive Optical Network devices progressively.

The global market witnessed steady growth during the COVID-19 pandemic. In contrast, many players in the industry have observed a rise in raw materials prices owing to supply constraints for materials such as silicon and copper that globally affected PON equipment’s manufacturing condition and pricing. However, at the end of 2020, the market flourished owing to increased internet subscribers and demand for PON equipment in the telecom sector.

  • For instance, the latest Survey by RVA Consulting published by the fibre broadband association highlights a 20.10% growth of net promoter scores for implementing and promoting FTTH.

Passive Optical Network Market

Passive Optical Network (PON) Market Trends

High-Speed Internet and Digital Technology Advancements to Boost the PON Market

In the age of digital revolution, growing internet penetration in rural and urban areas has transformed the global market scale with PON solutions such as GPON, XGS-PON, XG-PON, and NXG-PON. However, PON has accentuated the work-from-home (WFH) work culture in many countries in the time of COVID and rising content creation and video streaming platforms that include YouTube, social media, and OTT. These are the major factors that have augmented high-speed internet and higher bandwidth trends in the network industry. Furthermore, increasing 5G infrastructure investments, internet diffusion, and demand for connected home products in developing nations such as Vietnam, Indonesia, India, and others are exponentially raising funds for network-ready infrastructure. These are the catalysts for expanding the adoption of PON technology that supports manufacturing and development in these countries.

  • For instance, according to a report published in July 2022 by the Economic Co-operation and Development (OECD), high-speed optical fiber subscriptions have risen to 14%, which now accounts for 30% of the fixed broadband connections in those countries.

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Passive Optical Network (PON) Market Growth Factors

Growing Mandate for Reliable Networks, Reduced Cost, and Increased ROI are Prime Market Drivers

PON technology devices have enabled high-speed data transfer to longer distances, which maximizes the capabilities of PON devices and supports downstream and upstream data symmetrically. In addition, high standard prerequisites for complex networking in leading home products such as cloud gaming, Ultra HD TV, interactive video buffering, and connected smart home products have boosted the demand for PON devices. Thus, the constant progress of technology and increasing FTTH adoption among consumers for high-speed internet, offering a high return on investment and low ownership cost, is driving PON adoption in the long term.

Additionally, major broadband service providers were trying to achieve continuous bandwidth and accelerate the GPON Network solution. Thus, primary market needs for high-speed internet are the prime factors that are estimated to provide a stagnant demand for optical network devices over the forthcoming years.

RESTRAINING FACTORS

Emerging Players’ Penetration and Sustainability Standards are Prime Market Hindrances

End-users across the networking service industry are seeking equipment that minimizes energy costs and emits minimal radiation owing to stringent energy guidelines and high sustainability goals. Additionally, conventionally operating players are offering complex product portfolios and unclarified spectrum ranges, which are major factors that shift the consumer base toward new players. Additionally, emerging market contenders are offering quick installation and high optical density products that fulfil consumer requirements and acquire a reliable share in the market. These product offerings and reliable end-to-end solutions in the PON equipment sector are potential hindrances to the market.

  • For instance, in December 2022, India’s Sterlite, previously known as STL, a major player in the industry, extended from simple optical equipment offerings into diverse OLTs for broadband access. It has already started developing technologically advanced detachable products that apply a “pluggable” OLT product developed by Tibet.

Passive Optical Network (PON) Market Segmentation Analysis

By Technology Type Analysis

Growing Data Centers and Demand for Complex Yet Flexible Solutions are Prime Next Gen PON Drivers

The market technology type is classified into EPON, GPON, and others (Next-Gen PON). As per our report, (Next-Gen PON) in other segments has marked the highest CAGR of 15.8% and is dominating the product growth. EPON devices in the PON industry are the legacy product solution that offers high speed up to 500 Mbps to 1Gbps and has now grown to GPON and Next-Gen PON. However, the new-age GPON equipment can extend the network capabilities and bandwidth to 2.5Gbps. Furthermore, government regulations and facilities for incentivizing and expanding digitalization and internet penetration to remote sites have grown mobile backhaul technology growth; thus, as an estimated requirement for on-premise network solutions and accentuated work-from-home culture by the information technology industry is strengthening the demand for PON equipment market demand during the forecast period.

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By Component Analysis

Cluster Based Network Model, Government Investments for Infrastructure to Fuel the Market Growth

The PON component market is further classified into Optical Network Terminal (ONT), Optical Line Terminal (OLT), and Optical Distribution Network (ODN). As projected, OLT equipment is estimated to grow at a CAGR of 15.6%, the highest among component segments during the forecast period due to expanding data centres and network-ready infrastructure. However, ODN devices are estimated to grow steadily across the industry verticals owing to a cluster-based network distribution model, which is in line with the demand for OLT and ONT equipment. Thus, ONT in the passive optical industry is observed to depict a major growth due to driving factors such as an increasing consumer base and the need for optimized distribution, which will expand the PON market share progressively.

By Application Analysis

Exponential Consumer Base and Capital Intensive Digital Program to Boost FTTX Application   

PON devices have broadly been classified into various applications, which include mobile backhaul and Fiber to the X (FTTX), where X signifies the user’s location. It can be either a home (FTTH), premise (FTTP) or even a building (FTTB).

As per our analysis, PON equipment demand in recent years has increased steadily, owing to quick digitization and rapid broadband demand for fast internet services. Also, consumer dependencies on the internet have coined the global market for technologies such as optical Fiber to the X. These FTTX technologies are estimated to bridge the technology gap with the highest CAGR of 15.4%. At the same time, the consumer switch trend showcasing demand for new-age optical technology is cementing the application of FTTX deployment. Also, it supports growth factors such as the increase in the subscriber count of the FTTX Service provider. Furthermore, digital programs and incentive-focused plans by the government are prime factors that boost the sales of OEM players, resulting in progressive expansion of the passive optical network market share during the forecast period.

REGIONAL INSIGHTS

The report covers an in-depth scope and deep-dive analysis of five main regions: North America, Europe, Latin America, Asia Pacific, and the Middle East Africa.

Asia Pacific Passive Optical Network (PON) Market Size 2023 (USD Billion)

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According to our report, Asia Pacific is projected to hold the largest share owing to focused government initiatives and policies on extending digital capabilities and advancements in countries such as China, India, and Japan. At the same time, the prime player’s presence is estimated to secure decent growth with growing demand for FTTX solutions and ONT products in commercial and residential spaces and data centre premises. Furthermore, digital infrastructure development and exponentially growing network subscriptions for technologies such as Next-Gen PON and GPON will support the stagnant optical network equipment market during the forecast period.

  • February 2022: MR Organization Limited (MRO), an Ahmedabad-based PON equipment and rotatory machinery parts manufacturer company, acquired the U.K.-based Standard Air Limited part supplier of PON equipment.

As per our analysis, China is dominant in the Asia Pacific region as per mass population count, availing internet access and growing technology upgrades in the country for advanced capabilities in domains such as manufacturing, supply chain, information technology, and many more. Also, the growing telecom industry and internet service provider user acquisitions have helped the progress of PON equipment. The rising youth population and growing internet penetration in developing countries, such as India and Japan, are building a strong share of PON devices in the industry. Additionally, the expansion of 5G technology across India and other Asia Pacific regions and strong government policies and investments have uplifted the adoption of Next-Gen PON technology. This technologically advanced equipment and PON solutions are expected to expand the global market size of PON equipment.

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Passive Optical Network devices demand in North America is proposed to grow progressively during the forecast period, where increasing demand for equipment such as OLT intensifies internet speed both upstream and downstream, dominating the market. Furthermore, market insights reveal that end-users invest largely in the R&D of PON device development. Also, increasing investments and government programs to develop optical network infrastructure support PON device sales. In contrast, the adoption of Fiber to the Home solution (FTTH) in the U.S. has escalated the demand for PON equipment. Additionally, government investments to expand the telecom industry’s significance are complimentary boosters progressively uplifting the Passive Optical Network market growth.

For instance, in December 2022, Axion reported that the U.S. government is planning an investment of USD 1.5 billion to advance telecom infrastructure with the help of companies such as Nokia Telecommunications Company, Telefonaktiebolaget LM Ericsson, and Samsung Electronics Co Ltd.

The Europe market is growing steadily as the government emphasizes greener equipment solutions owing to rising electricity prices and environmental concerns. Increasing demand for OLT devices to avail uninterrupted data services and low latency by end-users for video chatting, video streaming, telephonic signals, and telecommunication channels positively supported the market’s growth. Additionally, end users’ rising disposable income and consumer spending on FTTH connectivity adoption of PON devices among the premises fuel the market growth.

For instance, in December 2022, the latest FTTH Council Europe report highlights that the number of users that opted for fiber-to-the-home (FTTH) services and fiber-to-the-building (FTTB) has grown from 172 million to 182.6 million homes by the year 2020.

The Latin America market will observe substantial growth during the forecast period. The growing internet penetration rate across zones such as Mexico, Brazil, Argentina, and others is fueling the demand for PON devices. In our market analysis, the EPON segment is growing substantially due to factors such as demand for high-speed internet services, technological advancements, and investments focusing on greener, sustainable network solutions to boost passive optical infrastructure development. Additionally, users seek advanced optical network terminals to acquire a prominent market share in the forecast period for easier network amplification and reduced latency.

  • For instance, in November 2021, according to a report by the Mobile Economy Latin America, the mobile subscribers count in the Latin America region is estimated to be 485 million by 2025, from 450 million in 2021.

The Middle East & Africa to showcase moderate growth owing to the increasing adoption of Passive Optical Network devices for smooth internet connectivity and advanced security. The equipment provides easy web installation and advanced user capabilities to switch multiple ports with low latency: region-specific digitalization and growth of digital significance through Next-Gen PON equipment to grow internet connectivity and penetration. OLT equipment and demand increased prominently in the pandemic for fluent internet connectivity and applications in the FTTH segment, which is expected to dominate the market for Passive Optical Network devices.

  • For instance, according to Fiber Broadband Association (FBA) and FTTH Council compiled data, United Arab Emirates UAE is ruling the global FTTH/B subscriptions with 97%, followed by Qatar’s 84%. 

KEY INDUSTRY PLAYERS

Active Upgrades and Key Players’ Acquisition Strategies Helped Acquire a Consistent Market Share

Key industry players have observed its deficit presence in the global passive optical-related equipment market and a sudden demand for a reliable and consistent network solution. The global market of Passive Optical Network is fairly consolidated, with the strong presence of the top 10 key players holding the market’s largest share. Also, expanding the portfolio of small emerging players in the sector to grow their company and offerings among consumers is helping to acquire larger consumer responses and consistent market share during the forecast period.

  • September 2022: Vecima Networks Inc., a leading network solution provider, has expanded its product portfolio by launching its Entra EXS1610 All-PON 10G solution. The EXS1610 supports widely deployed products of PON standards, which include EPON, GPON, 10G-EPON, and XGS-PON.

LIST OF TOP PASSIVE OPTICAL NETWORK (PON) COMPANIES:

KEY INDUSTRY DEVELOPMENTS:

  • October 2023: Nokia and its leading managed broadband service provider Zcorum announced a partnership that would enable the easy and fast deployment of Nokia PON Solutions. The partnership would further accelerate the deployment of GPON, XGS-PON, and 25G PON networks.
  • October 2023: Nokia, a leading technology giant, delivered industry first 25G PON sealed fiber access node for cable operators. The new solution will drive the opportunities for new symmetrical 10 GB per second solution for enterprise, network wholesaling, and mobile transport.
  • May 2023: Vietnam Posts and Technology (VNPT, a leading Vietnam operator, announced its deployment of 10G fiber broadband services. The first phase roll out will deploy services for 10,000 homes and business in major 8 provinces of the country.
  • February 2023: Saudi Telecom Company (STC) and Huawei Technology announced their completion of first 50G PON trial in the Middle East. The trials were conducted on a live optical network with Huawei.
  • December 2022: Nokia’s research wing, Nokia bell labs, has moved into the 100 Gbps broadband network technology segment with its latest prototype, which offers the potential to deliver 100 Gbps speed downstream with a single PON Wavelength.

REPORT COVERAGE

The research report covers a detailed depth analysis of the type, component, and application of the product. It provides information about leading players in the market and their business overview, product offerings, investments (R&D and expansions), revenue analysis, types, and leading applications of the product. Besides, it offers insights into the competitive landscape, SWOT analysis, and current market trends and highlights key drivers and restraints. In addition to the abovementioned factors, the report encompasses several factors contributing to the market’s growth in recent years.

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Report Scope & Segmentation












ATTRIBUTE

DETAILS

Study Period

2019-2032

Base Year

2023

Estimated Year

2024

Forecast Period

2024-2032

Historical Period

2019-2022

Growth Rate

CAGR of 15.2% from 2024 to 2032

Unit

Value (USD Billion)

Segmentation

By Technology Type

  • EPON
  • GPON
  • Others (Next-Gen PON)

By Component

  • Optical Line Terminal (OLT)
  • Optical Network Terminal (ONT)
  • Optical Distribution Network (ODN)

By Application



By Region

  • North America (By Technology Type, By Component, By Application, By Country)
    • U.S. (By Technology Type)
    • Canada (By Technology Type)

  • Europe (By Technology Type, By Component, By Application, By Country)
    • Germany (By Technology Type)
    • France (By Technology Type)
    • U.K. (By Technology Type)
    • Italy (By Technology Type)
    • Russia (By Technology Type)
    • Rest of Europe

  • Asia Pacific (By Technology Type, By Component, By Application, By Country)
    • China (By Technology Type)
    • India (By Technology Type)
    • South Korea (By Technology Type)
    • Japan (By Technology Type)
    • Australia (By Technology Type)
    • Taiwan (By Technology Type)
    • Indonesia (By Technology Type)
    • Thailand (By Technology Type)
    • Malaysia (By Technology Type)
    • Philippines (By Technology Type)
    • Vietnam (By Technology Type)
    • Rest of Asia Pacific

  • Latin America (By Technology Type, By Component, By Application, By Country)
    • Mexico (By Technology Type)
    • Brazil (By Technology Type)
    • Argentina (By Technology Type)
    • Rest of Latin America

  • Middle East & Africa (By Technology Type, By Component, By Application, By Country)
    • Turkey (By Technology Type)
    • Saudi Arabia (By Technology Type)
    • U.A.E (By Technology Type)
    • Rest of Middle East & Africa

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