Global Optical Communication and Networking Equipment Market Size, Share & Industry Trends Analysis Report By Component, By Vertical (IT & Telecom, BFSI, Government, Military & Defense, Healthcare, and Energy, Utilities), By Data Rate, By Technology, By Application, By Regional Outlook and Forecast, 2022 - 2028

Analysis of Market Size & Trends

The Global Optical Communication and Networking Equipment Market size is expected to reach $38.5 billion by 2028, rising at a market growth of 8.8% CAGR during the forecast period.

Optical communication and networking equipment use light to send signals that are encoded with information in different kinds of telecommunications networks. It involves a limited range of local-area networks (LAN) or wide-area networks (WAN), that cross metropolitan & regional areas along with long-distance national, international & transoceanic networks. Optical amplifiers, transceivers, termination devices, tunable filters, and add-drop multiplexers are among the optical components used in optical communication and networking. The market for optical communication and networking equipment is expanding as a result of the development of telecommunications infrastructure in developing nations.

The market is growing as a result of factors such as the increase in data traffic brought on by increased internet usage, the growing number of data centers, and the rising popularity of cloud-based and virtualization services. On the other hand, it is anticipated that the rapid implementation of VOIP, LTE, and 5G networks would offer attractive potential for market expansion. Additionally, the industry for optical communication and networking equipment is predicted to benefit from the surge in usage of AI and IoT.

The large bandwidth and scale needs of modern data center networks have led to the use of optical communication and networking technology. Over large distances, only optical communication technology has exhibited a capacity of 10 GB/s, 40 GB/s, and higher. In order to provide essential communications connectivity among various servers, computing resources, and memory, a rising number of data centers throughout the world rely on interconnects. In addition, factors including the rapid expansion of Internet Protocol (IP) traffic and cloud computing are boosting the number of data centers globally. As a result, the market for optical communication and networking equipment is growing rapidly due to the development of data centers.

COVID-19 Impact Analysis

The COVID-19 pandemic has had a substantial impact on the market for optical communication & networking equipment. Many firms first had supply issues as a result of production interruptions, which was the principal effect of the outbreak. The need for residential, commercial, and industry use of automation systems of buildings has declined as a result of lockdown measures and the suspension of non-essential companies. As a result, the production & supply of networking and optical communication equipment is returning to normal.

Market Growth Factors

Increased Internet Usage Across The World

As more devices are connected to the internet and new applications are created, the volume of information that is being transmitted through it, is continuously increasing. Mobile data traffic is also predicted to expand exponentially. Furthermore, it is expected that an increase in smartphone users will increase internet usage. There is an increased attention of the companies on meeting the surge in demand for telecommunications equipment brought on by the quickening of 5G deployment across the globe.

Rapid Expansion In The Telecom Industry

The expansion of the market would be positively impacted by the development of the telecommunications infrastructure in developed economies. The introduction of AI (artificial intelligence), and big data, along with the IoT (internet of things) has raised the need for smart gadgets and other associated applications. The telecommunications industry relies on interconnected technologies to move, capture, and translate data into useful information that is essential for bolstering urban infrastructure.

Market Restraining Factors

Rise In The Network Complexity

The use of connection ICs is expanding as a result of the diversity of protocols and platforms available, as well as the consistent need for smaller networks. Besides this, both hardware and software are essential components of products based on advancing technology, like IoT (Internet of Things) devices that are used in optical communication systems. The network is becoming by the usage of ICs and IoT devices. Similar to this, a single small device must be fixed with variable optical attenuators, drop modules, as well as tap power monitors for network monitoring and control.

Components Outlook

On the basis of components, the Optical Communication and Networking Equipment Market is segmented into optical fibers (single-mode fibers, multi-mode fibers), optical transceivers, optical amplifiers, optical switches, optical splitters, optical circulators and others. Optical splitter segment procured a promising revenue share in 2021. An optical splitter or beam splitter is an incorporated waveguide optical power distribution device that has multiple input and output ends that can split an incident light beam into two or more light beams or vice versa.

Vertical Outlook

Based on vertical, the optical communication & networking equipment market is divided into BFSI; government, military & defense; healthcare; IT & Telecom; and energy & utilities and others. In 2021, the healthcare segment acquired a promising revenue share in the optical communication & networking equipment market. This is because an efficient optical fiber network makes sure that medical institutes can transfer healthcare data in an efficient and secure manner. Also, it opens more ways of communication between the patients and healthcare providers.

Technology Outlook

Based on technology, the optical communication & networking equipment market is divided into SONET/SDH, Wavelength Division Multiplexing (WDM), and fiber channels. In 2021, the WDM segment generated the maximum revenue share in the optical communication & networking equipment market. WDM (Wavelength Division Multiplex) is a technique that allows the utilization of multiple light wavelengths in order to data through the same medium. The major factor responsible for the market growth in this segment is the fact that WDM technology increases bandwidth by enabling various data streams with different frequencies.

Data Rate Outlook

By data rate, the optical communication & networking equipment market is classified into up to 40 GBPS, greater than 40 Gbps to 100 Gbps, and greater than 100 Gbps. The greater than 100Gbps segment covered a significant revenue share of the optical communication & networking market. The demand for larger bandwidth devices with a data rate of greater than 100 Gbps is expected to grow in upcoming years because of the continuous development of 5G & high-performance services brought by cloud networks.

Application Outlook

On the basis of application, the optical communication & networking equipment market is fragmented into Telecom, data center, and enterprises. Telecom segment procured a revenue share in the optical communication and networking market in 2021. The growing need of high-speed communication which could be fulfilled by deployment of optical fibers supporting the growth of optical communication & networking equipment market. Increasing demand of value-added managed services is another factor supporting market growth in this segment.

Optical Communication and Networking Equipment Market Report Coverage

Report Attribute	Details
Market size value in 2021	USD 21.5 Billion
Market size forecast in 2028	USD 38.5 Billion
Base Year	2021
Historical Period	2018 to 2020
Forecast Period	2022 to 2028
Revenue Growth Rate	CAGR of 8.8% from 2022 to 2028
Number of Pages	420
Number of Tables	673
Report coverage	Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling
Segments covered	Component, Vertical, Data Rate, Technology, Application, Region
Country scope	US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria
Growth Drivers	Increased Internet Usage Across The World Rapid Expansion In The Telecom Industry
Restraints	Rise In The Network Complexity

Regional Outlook

Region-wise, the oral communication & networking equipment market is analyzed in North America, Europe, Asia Pacific, and LAMEA. In 2021, North America region emerged as the leading region in the optical communication & networking equipment with the maximum revenue share. It is because this region is a significant hub for data centers and cloud computing. The United States is the biggest consumer of networking and optical communication equipment market. Additionally, the growth can be attributed to the increased application of advanced optical technologies in the region.

Free Valuable Insights: Global Optical Communication and Networking Equipment Market size to reach USD 38.5 Billion by 2028

KBV Cardinal Matrix - Optical Communication and Networking Equipment Market Competition Analysis

The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; Huawei Technologies Co., Ltd. and Cisco Systems, Inc. are the forerunners in the Optical Communication and Networking Equipment Market. Companies such as Nokia Corporation, Infinera Corporation, ZTE Corporation are some of the key innovators in Optical Communication and Networking Equipment Market.

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Fujitsu Limited, Cisco Systems, Inc., Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Nokia Corporation, Juniper Networks, Inc., ZTE Corporation, ADTRAN, Inc., II-VI Incorporated, Ciena Corporation, and Infinera Corporation.

Recent Strategies Deployed in Ultra-Mobile Devices Market

» Partnerships, Collaborations and Agreements:

• Mar-2022: Cisco collaborated with Tech Mahindra, an Indian multinational information technology services & consulting company. The collaboration aimed to simplify the Internet transport networks by utilization of optical & routing technologies to converge services over an IP infrastructure allowing a high degree of automation. Further, by this move, the companies also aimed to modernize fifth-generation or 5G infrastructure with its routed optical networking solution.
• Feb-2022: Fujitsu partnered with Ekinops, a leading supplier of optical transport & network access solutions. Fujitsu would integrate the Ekinops next-generation OTN compact modular switches into the Fujitsu 1FINITY open optical networking portfolio, providing service providers with even more choice & flexibility in open networking solutions.
• Jan-2022: Nokia entered into a partnership with IP Telecom, Ireland's most competitive SME & Enterprise VoIP provider. The companies aimed to deliver quantum-safe data center connectivity. Under this partnership, Nokia would supply IP Telecom with optical networking equipment to expand the operator’s data center cloud connectivity infrastructure among metro areas in Portugal. This partnership would enable IP Telecom to reach business & government end users through a highly secure, encrypted 100Gbps optical data center interconnect (DCI) solution.
• Sep-2021: ZTE Corporation signed an agreement with China Telecom Global Limited, one of the world's largest providers of integrated telecommunication services. Under this agreement, both parties would further deepen their strategic cooperation in cloud network services, ICT, data centers & global operation in the DICT field.
• Jul-2021: Fujitsu Optical Components Limited teamed up with Furukawa Electric, a Japanese electric and electronics equipment company. The companies aimed at creating world-class, top-performing devices for next-generation communications networks by combining the technologies of both companies in order to respond to the explosive rise in communications traffic & demand for decreased power consumption.
• Jul-2021: Infinera partnered with Hatif Libya, an LPTIC subsidiary company. This partnership would increase opportunities for joint economic cooperation between Libya & the U.S. in the field of communications & information technology. Additionally, this partnership would present a new frontier for investment & collaboration, expanding beyond the traditional energy & security sectors.
• Mar-2020: Cisco came into a partnership with Bharti Airtel, an Indian multinational telecommunications services company. Through this partnership, the companies aimed to introduce India’s largest 5G-ready, 100G IP & optical integrated network to improve network capacity. The deployment is a part of Airtel’s initiative to build a 5 G-ready network that continues to meet the increasing demand for speedy data services in the country.
• Feb-2020: Infinera joined hands with II-VI Incorporated, a global leader in optical communications modules. The companies aimed to bring to market XR optics-based networking solutions. Further, this collaboration would allow both companies to jointly deliver digital coherent optics in small pluggable form-factors & with low power consumption.

» Product Launches and Product Expansions:

• May-2022: Nokia introduced Nokia Cloud Native Communication Suite (CNCS), a new cloud-native IMS Voice Core product architected as a single Cloud Native Network Function (CNF). From this launch, the company aimed to help communication service providers (CSPs) simplify their network operations, enhance operational agility, & reduce the cost of managing the network.
• Dec-2021: Nokia introduced Gigabit Connect. This product is launched to make it easy for fiber network providers to deploy gigabit broadband services in MDUs where the final connection leg is through twisted pair or coaxial cables. Nokia’s Gigabit Connect solution builds on G.fast capabilities, hiding its complexity & allowing the last leg connection to be managed as a fiber endpoint under a single pane of the glass management interface. Gigabit Connect solution would deliver the same speed & low-latency experience for the end user as full FTTH.
• Oct-2021: ZTE Corporation released ZXMP M721 series, namely ZXMP M721 CX66A (E) and ZXMP M721 CX63A (E), new-generation compact metro edge ON products, the optical Omni-gateway. These products would support all-scenario access of 4G/5G/home broadband/enterprise/cloud services with large-capacity & unified cross connection. Furthermore, they are applicable to the aggregation layer & access layer of a MAN (Metro Area Network) or local network in order to make operators' optical network deployment flexible & efficient.
• May-2020: Nokia unveiled WaveFabric Elements optical portfolio. This launch aimed to fulfill surging demands from 5G & cloud. This portfolio involves fifth-generation Photonic Service Engine coherent digital signal processors, optimized for end-to-end 400G optical transport.

» Acquisitions and Mergers:

• Aug-2021: ADTRAN merged with ADVA, global leadership in metro wavelength division multiplexing, data center interconnect, business ethernet, and network synchronization solutions. The merger aimed to create a leading global, scaled provider of end-to-end fiber networking solutions for communications service providers, enterprises & government consumers.
• May-2021: Cisco took over Sedona Systems, a technology company that offers a leading multi-vendor, cross-domain network controller. The acquired company would add strong talent to Cisco that would continue to enhance optical capabilities for the Mass-scale Infrastructure Group (MIG) & improve Cisco’s network automation Crosswork portfolio.
• Mar-2021: Cisco acquired Acacia Communications, a Massachusetts-based company. This acquisition would reinforce Cisco’s commitment to optics as a critical building block that would improve the company’s ‘Internet for the Future’ strategy with world-class coherent optical solutions for consumers, further allowing them to address the unprecedented scale of modern IT.
• Jan-2021: Cisco took over Banzai Cloud, a privately held company that specializes in deploying cloud-native applications securely, at scale, & in production. This acquisition would expand the company's capabilities & expertise through Banzai Cloud's demonstrated experience with entire end-to-end cloud-native application development, deployment, runtime & security workflows.
• Mar-2020: Nokia completed the acquisition of Elenion Technologies, a U.S.-based company focusing on silicon photonics technology. Through this acquisition, Nokia would be able to expand its market footprint by addressing the critical & rapidly evolving optical connectivity requirements of 5G, cloud & enterprise networking through Elenion’s technology expertise & exceptional design platform & services.
• Oct-2018: Infinera completed the acquisition of Coriant, a privately held global supplier of open network solutions for the largest global network operators. The acquisition would position the company as one of the biggest vertically integrated optical network equipment providers across the globe.

Scope of the Study

Market Segments Covered in the Report:

By Component

• Optical Fibers
  • Multi-Mode Fibers
  • Single-Mode Fibers
• Optical Transceivers
• Optical Amplifiers
• Optical Switches
• Optical Splitters
• Optical Circulators
• Others

By Vertical

• IT & Telecom
• BFSI
• Government, Military & Defense
• Healthcare
• Energy, Utilities & Others

By Data Rate

• Up To 40 GBPS
• Greater Than 40 Gbps To 100 Gbps
• Greater Than 100 Gbps

By Technology

• Wavelength Division Multiplexing (WDM)
• SONET/SDH
• Fiber Channel

By Application

• Datacenter
• Telecom
• Enterprises

By Geography

• North America
  • US
  • Canada
  • Mexico
  • Rest of North America
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Singapore
  • Malaysia
  • Rest of Asia Pacific
• LAMEA
  • Brazil
  • Argentina
  • UAE
  • Saudi Arabia
  • South Africa
  • Nigeria
  • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

• Fujitsu Limited
• Cisco Systems, Inc.
• Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.)
• Nokia Corporation
• Juniper Networks, Inc.
• ZTE Corporation
• ADTRAN, Inc.
• II-VI Incorporated
• Ciena Corporation
• Infinera Corporation