Passive optical LAN (POL) is a layer-2 transport medium, manufactured with passive optical network (PON) technology that provides converged video, data, and voice services at gigabit speeds over a single strand of fiber to the user’s location. In the conventional model, the data is dispersed and transmitted to the desktop through layers of cables, switches, and routers, which incurs into additional cost. POL is a more cost-effective and energy-efficient substitute. It uses a different type of architecture with single-mode fiber. Moreover, a POL is comprised of an optical line terminal (OLT), optical network terminals (ONTs), and an optical splitter to transmit audio.
The global passive optical LAN (POL) market is estimated to be valued at US$ 41.8 million in 2021 and is expected to exhibit a CAGR of 25.1 % over the forecast period (2021-2028).
In August 2021, The Association for Passive Optical LAN (APOLAN), the non-profit organization advocating for the education and global adoption for Passive Optical Local Area Networks (POL), announced benefits of POL in optimizing and supporting the evolution of wireless network design. Fiber-based networks deliver seamless scalability with unmatched speed, efficiency and simplified design to support the wireless technology evolution.
Figure 1. Global Passive Optical LAN (POL) Market Value (US$ Mn), by Region, 2020
APAC (Region) held dominant position in the global passive optical LAN (POL) market in 2020, accounting for 38.6% share in terms of volume, followed by North America and Europe, respectively. The increasing demand for more bandwidth and the fact that passive optical LAN systems are energy efficient and long lasting, have further propelled its demand in the developing nations of Asia Pacific such as India, and others.
Global Passive Optical LAN (POL) Market: Drivers
Energy efficient network solutions due to the use of passive optical components are expected to drive growth of the global passive optical LAN (POL) market during the forecast period
POL solutions are more eco-friendly than traditional copper-based Ethernet local network. Rather than using workgroup switches, POL solutions use optical splitters. It also complies with HVAC standards by removing the workgroup switches, which in turn, eliminates the usage of thousands of KW energy. Moreover, PON uses small passive optical splitters, located at the enclosures in a building, usually on every floor. Therefore, PON produces no heat, requires no power, and can even be mounted in electrical closets. These systems reduce the ceiling space used and their fire load saving ability makes them environment-friendly. Hence, these factors are expected to drive growth of the global passive optical LAN (POL) market during the forecast period.
Increasing bandwidth requirements is expected to propel the global passive optical LAN (POL) market growth over the forecast period
Currently, there is a massive demand for higher bandwidth in the market. In a study conducted with IT professionals as respondents, about 81% admitted that the demand for higher bandwidth is currently huge and it is also expected to grow further in the near future. Increasing number of subscribers bring more number of devices connected to networks and more data-dense services to ride over the networks. According to Coherent Market Insights’ analysis, African region is expected to witness the highest demand for bandwidth by accounting for over 50% CAGR. Moreover, the bandwidth demand in the Asian market is expected to rise at a CAGR of over 30%. Therefore, these factors are expected to propel the global passive optical LAN (POL) market growth in the near future.
Global Passive Optical LAN (POL) Market: Opportunities
Research and development (R&D) activities can provide significant business opportunities in the global passive optical LAN (POL) market
Major market players are involved in research and development activities, in order to enhance the market presence. For instance, in June 2014, 3M Company introduced 3M Easy Cleaver, the latest fiber cleaving tool that makes fiber installation faster and more cost-effective. In 2012, 3M introduced two optical components, namely, Coarse Wavelength Division Multiplexers and Planar Light Circuit (PLC).
Partnerships and collaborations can present lucrative growth opportunities in the global passive optical LAN (POL) market
Major market players are involved in partnerships and collaborations, in order to gain a competitive edge in the market. For instance, in July 2012, Adtran Inc. partnered with Troy Cable to provide virtually unlimited bandwidth network and ultra-high service density. In March 2014, Alcatel-Lucent partnered with Telkom Akses, a Telkom Indonesia subsidiary, to deliver fiber to premises ultra-broadband access for subscribers in Indonesia by using FTTx technology.
|Base Year:||2020||Market Size in 2021:||US$ 33.8 Mn|
|Historical Data for:||2017 to 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||25.1%||2028 Value Projection:||US$ 200.7 Mn|
3M Company, Freescale Semiconductor, Inc., Adtran, Inc., Ericsson, Inc., Alcatel-Lucent, Broadcom Corporation, Inc., and AT&T Inc.
|Restraints & Challenges:||
Launch of novel products is a key trend
Key market players are focused on launching new products, in order to expand their product portfolio. For instance, in January 2013, 3M introduced a portfolio of passive optical LAN solutions at BICSI Winter Conference and Exhibition held in Tampa, Florida, for the enterprise LAN. The fiber-to-the-desktop (FTTD) LAN technology is currently gaining high popularity than traditional copper-based Ethernet switches, thus the company unveiled POL solutions for tapping the FTTD LAN technology market.
Growing investment by market players
Major market players are focused on investments, to enhance the market presence. For instance, in 2012, Alcatel-Lucent invested US$ 3.3 billion on research and development. Alliance Fiber Optic Products, Inc. is actively engaged in R&D and it invested USD 3.7 million in 2013 and USD 3.2 million in 2012 on R&D activities.
Figure 2. Global Passive Optical LAN (POL) Market Share, By Component, 2020
Key Takeaways of the Graph:
Global Passive Optical LAN (POL) Market: Restraints
Technical and operational issues such as dispersion, attenuation, and signal losses are expected to restrain growth of the global passive optical LAN (POL) market during the forecast period
Dispersion is a major restraining factor in the market. This is the process that involves spreading the signal in time. Two types of dispersion can affect an optical data link: chromatic dispersion and modal dispersion. In chromatic dispersion, the spreading of signal in time results from the different speeds of light rays. Modal dispersion is the spreading of signal in time resulting from the different propagation modes in the fiber. Although attenuation is significantly lower in optical fibers than for other media, it still occurs in both single-mode and multi-mode transmission. An efficient optical data link must have sufficient light available to overcome attenuation. Hence, these factors are expected to restrain growth of the global passive optical LAN (POL) market during the forecast period.
Growing preference of wireless network is expected to hamper the global passive optical LAN (POL) market growth over the forecast period
Growing preference for wireless broadband is the main challenge the passive optical LAN market is facing currently. Mobile technology is advancing rapidly and the use of smartphones and tablets has increased significantly over the past few years. 4G LTE networks provide high speed Internet connectivity, which is beneficial for mobile users. Service providers are determined to introduce advanced LTE in the near future. Therefore, these factors are expected to hamper the global passive optical LAN (POL) market growth in the near future.
Global Passive Optical LAN (POL) Market: Competitive Landscape
Key companies operating in the global passive optical LAN (POL) market are 3M Company, Freescale Semiconductor, Inc., Adtran, Inc., Ericsson, Inc., Alcatel-Lucent, Broadcom Corporation, Inc., and AT&T Inc.
A passive optical network (PON) is a form of fiber-optic communications technology offering broadband communication to end-users. Its architecture involves a point-to-point multipoint topology where a single optical fiber serves multiple end-points by the use of multiple unpower-driven (passive) fibers optic splitters. The term 'passive' was coined to represent this structure's ability to utilize the existing power distribution in the network, without requiring any form of active equipment. Unlike other forms of optical networking whereby optical fibers are deployed as active devices, the use of such a system enables providers to implement low cost, high quality optical networks with passive optical fibers.
Increasing demand for internet-connected devices and services is expected to propel growth of the global passive optical LAN (POL) market. For instance, in February 2021, Nokia and Vodafone trialed Passive Optical Network, a new fiber optic technology that would allow speeds up to 100 Gb/s on a single wavelength.
Major players operating in the global passive optical LAN (POL) market are focused on launching new products to expand their product portfolio. For instance, in October 2020, Tellabs, the provider of PON solutions, announced successful completion of Department of Defense Joint Interoperability Test Command testing for Tellabs OLAN System Release 31.3 (SR31.3), including the 10-gigabit XGS-PON Tellabs FlexSym Optical Network Terminal 248 (ONT248) and Tellabs FlexSym Optical Network Terminal 205 (ONT205).
Key features of the study:
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