Passive optical network (PON) is a fiber to the enterprise (FTTP), a point-to-multipoint network structure. A passive optical network is eco-friendly solution as compared to conventional networks, due to the usage of unpowered optical splitters. Optical splitters collect and separate optical signals, as they travel in the network. The necessity of the powered equipment is only at the receiving end and it is a source of the signal, unlike the traditional network.
The global passive optical network (PON) equipment market is expected to surpass US$ 71.79 Mn in terms of value by the end of 2028.
Advantages such as reliability and safety are expected to propel the global passive optical network (PON) equipment market growth over the forecast period. Unlike conventional network that uses copper, a passive optical network (PON) uses optical fibers, which are made up of dielectric material. As a result of this, no electromagnetic radiations are produced and thus, no information or data can be stolen or lost. As a matter of fact, PON offers higher reliability and security, as compared to that offered by the traditional networks. Furthermore, passive optical networks provide easy installation and maintenance, as compared to the traditional networks which makes its operations much more simplified. The use of PON minimizes the network’s downtime during up-gradation and expansion, using the existing fiber optic cable and only replacing the electronics, rather than changing the entire infrastructure. Besides, PON is a simplified network, as compared to traditional networks.
High growth in European region can present lucrative growth opportunities in the global passive optical network (PON) equipment market. PON provides reliability, scalability, energy savings, environment sustainability, optimized bandwidth connectivity, ease of use, and advanced security. As PON provides multiple benefits, its usage is on a constant rise. The rising demands for bandwidth can be served by passive optical networks with additional benefits. Thus, these factors boost PON’s growth and ensure its sustainability. In the European region, PON is growing at an increasing rate. As can be seen from the graph above, the number of households that were connected to the fiber-to-the-home (FTTH) network in 2007 through the passive optical network was 1,962,000 and it increased to 16,446,000 in 2012. Furthermore, the number of subscribers is expected to rise to 41,441,000 until 2017.
Global Passive Optical Network (PON) Equipment Market: Recent Developments
Significant investment at the service provider’s end is expected to hinder the global passive optical network (PON) equipment market. There is a significant investment involved in the service provider’s end, which remains a major restraining factor. Furthermore, fiber trenching incurs high investments as compared to the equipment cost, which leads to high capital expenditure.
Global Passive Optical Network (PON) Equipment Market - Impact of Coronavirus (Covid-19) Pandemic
The outbreak of COVID-19 pandemic has hampered the global passive optical network (PON) equipment market severely in the recent past. With many countries adopting stringent lockdown policies implemented in many countries, economic activities witnessed major drop. Various manufacturing sectors witnessed a sharp decline due to strict regulations on physical distancing. Global supply chain industry also witnessed major disruption due to challenges associated with international trade and lack of overall mobility. Although the demand for broadband network increased during the COVID-19 pandemic as many companies had moved to work from home policies, catering that demand become challenging due to lockdown policies. However, market is expected to gain its lost traction with rollout of vaccines and relaxation in COVID-19 regulations.
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PON technologies are expected to be developed into two phases namely NG-PON and XG-PON with downstream and upstream speed. The XG-PON provides its users with a downstream speed of 10G and an upstream speed of 2.5G to 5G. Moreover, with further technological advancements, XG-PON would be changed to next-generation passive optical network (NG-PON 2), in which no co-existence is required.
Major companies in the market are focused on investments, in order to expand their market presence. For instance, Adtran Inc. invested US$ 125.9 million, US$ 100.3 million and US$ 90.3 million in research and development activities in 2012, 2011, and 2010, respectively. Product innovations are enabling the company to provide services to the customers in a better way. Furthermore, in 2012, Alcatel-Lucent invested US$ 3.3 billion on research and development.
Major companies operating in the global passive optical network (PON) equipment market are Adtran Inc., Huawei Technologies Co. Ltd., Alcatel-Lucent S.A., Hitachi Communication Technologies, Inc., AT & T Inc., Freescale Semiconductor, Inc., Broadcom Corporation, Inc., Ericsson Inc., Calix Inc., and ECI Telecom, Ltd.