Optical Communication and Networking Market Size By Component (Optical Fiber, Optical Transceiver, Optical Switch, Optical Amplifier, Optical Circulator), By Technology (Wavelength Division Multiplexing (WDM), Synchronous Optical Network (SONET), Fiber Channel), By Application (IT & Telecom, BFSI, Government & Defense, Healthcare, Retail, Energy & Utilities), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2023 – 2032

Industry Statistics

Optical Communication and Networking Market size was worth more than USD 20 billion in 2022 and is anticipated to exhibit over 10% CAGR from 2023-2032. Growing demand for robust internet connection for stronger remote communication will showcase a positive industry outlook.
 

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Rapid digitization has accelerated internet traffic and is proliferating the need for reliable internet connectivity worldwide. High penetration of next-generation technologies such as artificial intelligence (AI), and the internet of things (IoT) will foster faster internet communication systems and standards.
 

In recent years, bring your own device (BYOD) policies have gained significant momentum with enterprises encouraging their employees to adhere to the evolving workspaces. BYOD structures offer a myriad of benefits such as enhanced enterprise agility and a reduction in infrastructure spending. However, these devices often lack strong data security protocols, which increases the risk of breaches in enterprise networks, and business-critical data, thus fueling the need for optical communication and networking solutions. These tools help organizations secure data on employee devices and build an unbreachable layer of security over authentication, and passwords.
 

Transmission losses associated with optical beam to hamper industry expansion

The possibility of transmission losses is a critical challenge for the optical communication and networking industry. Transmission losses or optical beam attenuation occurs when the beam spreads and the power level of signals drop while traveling from the transmitter end to the receiver end. The frequency of beam attenuation increases with a rise in turbulence in wind currents. This scenario hinders displacement of the transmitted beam, ultimately affecting the networking capabilities. Power transmission systems are also in certain cases exposed to seismic activities which can again induce relative displacement.
 

Rising deployment of private 4G & 5G data networks to propel the demand for optical circulators

Optical communication and networking market size from optical circulators is expected to record over 5% CAGR between 2023-2032. Optical circulators are picking up pace as they facilitate the bi-directional transmission of data over a single fiber. In the past few years, fiber optic circulators have witnessed widespread demand across applications such as telecommunications, military, and aerospace sectors. Growing dependence on optical circulators to support private data networks will complement the segment growth. Advancements in 5G and 4G technologies will fuel the deployment of private data networks worldwide. 
 

Large number of connected devices to boost adoption of wavelength division multiplexing technology

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Wavelength Division Multiplexing (WDM) held more than 45% share in the optical communication and networking market in 2022. The increasing use of high-speed internet service in urban areas has accelerated the demand for WDM solutions. The technology benefits vendors by reducing the cost of transmitters and offers a wide spectrum. Smart technologies and AI-based devices have penetrated residential as well as commercial applications. Connected devices used in homes and offices need automation, large capacity, and flexible automation. WDM helps users address these requirements of connected technologies. The number of connected devices is estimated to reach 125 billion by 2030, with every consumer owning approximately 15 units of this technology. 
 

Digitalization of the healthcare sector to increase preference for optical communication & networking

Healthcare industry segment is projected to expand at over 15% CAGR from 2023-2032. Digitalization has picked pace across the healthcare sector driving the integration of AI and IoT technologies in medical devices, record keeping, consultation, and diagnosis & treatment. Due to growing dependence on sophisticated systems, the healthcare sector is propelling the demand for reliable and secure network infrastructure capable of backing IoT device connectivity. Moreover, increasing awareness regarding minimally invasive surgery has led to the large-scale adoption of technologies depending on fiber optics.
 

High prevalence of telecom partnerships to favor APAC optical communication & networking industry

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Asia Pacific optical communication & networking market share was more than 30% in 2022. Over the last decade, countries such as India, and China have experienced a dynamic development in 5G networks. Telecom subscribers in the region are propelling the demand for optical communication and networking solutions and products as they offer greater connectivity and ultra-fast speed. The rising popularity of optical communication products can be attributed to their ability to offer low latency to telecom providers, and internet service providers among others. Telecom partners are foraying into collaborations and partnerships with providers of optical networking to enhance access to state-of-the-art 5G services.
 

New product launches to complement optical communication and networking industry share

Some of the leading companies in the global optical communication and networking market include Huawei Technologies Co. Ltd, Ciena Corporation, ZTE Corporation, Nokia Corporation, FiberHome, Fujitsu, and NEC Corporation. These companies are focusing on the innovation of product portfolios to gain a competitive advantage.
 

Impact of COVID-19 pandemic on optical communication and networking industry outlook

The COVID-19 pandemic positively affected optical communication and networking market trends. The pandemic resulted in an unprecedented surge in demand for bandwidth since lockdowns and social distancing norms forced people worldwide to stay at home. Offices, schools, and colleges adopted digital models such as online learning, and work from home. Recreational activities were also done online during the pandemic. This led to a skyrocketing demand for bandwidth in the first quarter of 2020, with 40% to 50% growth in internet usage in the U.S., and Canada. Similar trends were seen in Spain, the UK, and Portugal, where internet usage increased by 50%. The pandemic expedited the upstream internet traffic enormously. According to Nokia, the U.S. witnessed a 30% surge in upstream traffic in March 2020.
 

The optical communication and networking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2032 for the following segments:

By Component

• Optical Fiber
• Optical Transceiver
• Optical Switch
• Optical Amplifier
• Optical Circulator
• Others

By Technology

• Wavelength Division Multiplexing (WDM)
• Synchronous Optical Network (SONET)
• Fiber Channel

By Application

• IT & Telecom
• BFSI
• Government & Defense
• Healthcare
• Retail
• Energy & Utilities
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • South Korea
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Colombia
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • South Africa
  • Israel