Optical Transport Network Market to Reach US$ 33.44 Billion at CAGR of 12.45% by 2025

Optical Transport Network (OTN) Market to 2025 - Global Analysis and Forecasts by Technology (WDM and DWDM); Component (Optical Switch, Optical Transport and Optical Packet Platform); Service (Network Design and Network Maintenance and Support) and End-use Verticals (Communication Service Provider, Enterprise and Government)

Publication Month : Jul 2017

  • Report Code : TIPTE100000315
  • Category : Electronics and Semiconductor
  • Status : Published
  • No. of Pages : 189
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The optical transport network market was valued at US$ 11.70 billion in 2016 and is projected to reach US$ 33.44 billion by 2025; it is expected to grow at a CAGR of 12.4% during 2017–2025.

The rapid increase in internet users, both at home and at work, has created a new level of bandwidth demand in the network world. Because of the rising usage of online gaming, social networking, video chatting, and many other real-time streaming activities, there has been a large uptake among residential users. One of the main reasons for the rising traction of the optical transport network market is that it provides smooth data transfer and eliminates latency difficulties. According to recent statements by service providers, corporations, and suppliers, the adoption of 100G systems is gaining steam in response to increased bandwidth demand.

Furthermore, corporate clients, particularly financial corporations and government entities, have witnessed a significant growth in bandwidth requirements. Furthermore, because to the rising pressure on present networks, companies have found it challenging to implement and operate their sophisticated systems. Latency, bandwidth limitation, robust management, transparent client signals, greater scalability, and global acceptability as a standard are all challenges that the current Synchronous Optical Network (SONET)/ Synchronous Digital Hierarchy (SDH) networks have. As a result, the adoption of optical transport network is increasing gradually across the globe.

Lucrative Regions for Optical transport network Market

Lucrative Regions for Optical transport network Market
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Market Insights–Optical transport network Market

Increasing Demand for Greater Bandwidth with Improved Internet Network

Ever-increasing demand for greater bandwidth is putting more load on current network and are making it more difficult for vendors to deploy and manage their advanced systems. To accommodate this increasing demand, OTNs have come into existence which has become the backbone for our next generation networks. Fiber optics are rapidly replacing copper wire and other media and is becoming the fastest and most reliable media. Two most important factors driving the internet network industry are; speed and reliability. Still there is tremendous increase in load on network now a day. Voice, video, and other multimedia has now become the major components to be carried through the network leaving data as minor component of what the network carries.

Interrupted voice and video communication has become one of the necessary for end users. Therefore, OTNs network has become backbone transport layer which can support a 100 G and the only standard that can provide the speed and reliability needed as per current scenario. Until new technology comes along, the OTN standard holds center stage, as it is the fastest and the most efficient network. The high speed that OTNs provide is substantial as well as scalable to meet current as well as future demands. 


Technology Segment Insight

Based on the technology used, Optical Transport Networks can be categorized into Wavelength-division multiplexing (WDM) and Dense Wavelength-division multiplexing (DWDM). Dense Wavelength Division Multiplexing (DWDM) is a fiber-optic transmission technique. It involves the process of multiplexing many different wavelength signals onto a single fiber. So, each fiber has a set of parallel optical channels each using slightly different light wavelengths. DWDM is higher performance transmission method than WDM. DWDM can transmit data as 2.5 to 10 Gbps at 160 channels in the same time. Moreover, DWDM is developed channel spacing up to 25 to 50 GHz then it can support transmission more than 1 Tbps. Thus, the DWDM segment in optical transport network market is projected to provide numerous lucrative business opportunities for the market players in the forecast period.


Component Segment Insights

On the basis of component, the

global optical transport network market can be bifurcated into optical switch, optical transport and optical packet platform. Fiber optic components enables to manage and switch photonic signals without converting photonic signals into electronic signals, irrespective of the protocol or line speed. Whereas, traditional switches, which connects optical fiber lines are electro-optic. Optic components helps to distribute signals at different wavelengths and sends them to different ports


Service Segment Insight

Based on the service, global optical transport network market can be bifurcated into network design and network maintenance and support. Network design is more than mere act of connecting the wires of a network and adjusting a couple of settings in your server. Network designing is a process that comprises customization of network protocols and software according to the end – user’s requirements. Furthermore, the process of network designing involves exhaustive network planning. Network design planning allows the customers to ensure that their network works quickly and at a consistently high level of performance. This further enhances the resiliency, scalability and security of the networks. As the communication industry is taking a shift towards cloud consumption model, the optical networks are required to be more flexible and dynamic while providing dependable connectivity for huge bandwidth demands. This further involves the demand for managed IT services and on-demand IT support. The network maintenance and support segment for the OTN market comprises of system, installation and maintenance, server installation, network configuration, maintenance of existing OTN network, etc.

End User Segment Insight

Service provider networks and telecommunications industry must rapidly change in order to handle the explosion of digital traffic propelled by mobile applications, multimedia services, social media, cloud computing and VoIP. Additionally, there’s an ever-growing range of bandwidth-intensive applications. Service providers are constantly deploying optical transport network with an aim to enhance bandwidth and network functionality. Optical transport network has enabled network service providers to support different traffic types in a further economical way than SONET/SDH networks. However, the amount of carriers’ investment in optical transport network is proportional to the nature of their traffic loads. Optical network transports may not be a feasible option for heavy amounts of IP traffic. On the other hand, several providers are utilizing optical transport network for packet traffic to attain transparency as it can traverse the Dense Wave Division Multiplexing (DWDM) layers and maintaining Time-Division Multiplexing (TDM)-like functionality at far higher bit rates. The communication service provider in global optical transport network market is expected to grow at a CAGR of 12.3% during the forecast period.

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Optical Transport Network (OTN) Market: Strategic Insights

optical-transport-network-market
Market Size Value inUS$ 11.70 Billion in 2016
Market Size Value byUS$ 33.44 Billion by 2025
Growth rateCAGR of 12.4% from 2017-2025
Forecast Period2017-2025
Base Year2017
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Market initiative was observed as the most adopted strategy in global optical transport network industry. Few of the market initiative are listed below;

2017:LuxNetwork selected Ciera’s 6500 Packet-Optical Platform with integrated Wave Logic Encryption for its new 100G network.
2017:East Kentucky Network, LLC selected converged packet optical solutions from Ciena to increase network capacity, enhance service offerings and provide greater network reliability.
2017:Infinera XTS-3300 Meshponder Delivers Industry-leading 19 Terabits of Capacity on Trans-Atlantic Route.

Global Optical Transport Network Market – By Technology

  • WDM
  • DWDM

By Components

  • Optical Switch
  • Optical Transport
  • Optical Packet Platform

By Service

  • Network Design
  • Network Maintenance and Support

By End-user Vertical

  • Communication Service Providers
  • Enterprises
  • Government

By Geography

  • North America

    • U.S.
    • Canada
    • Mexico
  • Europe

    • France
    • Germany
    • Italy
    • Spain
    • U.K
  • Asia Pacific (APAC)

    • Japan
    • China
    • India
    • S. Korea
  • Middle East & Africa (MEA)

    • Saudi Arabia
    • South Africa
    • UAE
  • South America (SAM)

    • Brazil


Optical transport network Market - Company Profiles

  • ADVA Optical Networking SE
  • ADTRAN, Inc.
  • ALCATEL LUCENT
  • Aliathon Technologies
  • Ciena Corp.
  • Cisco Systems, Inc.
  • Fujitsu Limited
  • Huawei Technologies Co.Ltd.
  • Infinera Corporation
  • ZTE Corporation
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Technology ; Component ; Service and End-use Verticals

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

US, Canada, Mexico, UK, Germany, Spain, Italy, France, India, China, Japan, South Korea, Australia, UAE, Saudi Arabia, South Africa, Brazil, Argentina

The List of Companies

1. Fujitsu Ltd.
2. Huawei Technologies Ltd.
3. ZTE Corporation
4. Cisco Systems, Inc.
5. Alcatel-Lucent
6. ADVA Optical Networking
7. Infinera
8. Ciena
9. Aliathan Technology
10. ADTRAN

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

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  • Validates and strengthens in-house secondary research findings
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Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
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Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

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  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

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