Optical Transport Network Global Market Report 2024

The optical transport network market size has grown strongly in recent years. It will grow from $23.2 billion in 2023 to $25.24 billion in 2024 at a compound annual growth rate (CAGR) of 8.8%. The growth observed in the historical period can be attributed to the migration from legacy systems, increasing bandwidth demand, evolution in the telecom industry, growth in cloud computing, and the changing requirements of enterprise networks.

The optical transport network market size is expected to see rapid growth in the next few years. It will grow to $37.75 billion in 2028 at a compound annual growth rate (CAGR) of 10.6%. The anticipated growth in the forecast period can be attributed to the rising demand for bandwidth, deployments of 5G networks, the growth of edge computing, expansion of the Internet of Things (IoT), and the adoption of network virtualization and SDN/NFV. Major trends in the forecast period include advancements in optical technologies, increased demand for interconnectivity, the emphasis on automation and orchestration, network convergence, and the implementation of enhanced security protocols.

The swift expansion of IP and Ethernet technologies is anticipated to drive the growth of the optical transport network market. Key factors contributing to the growth of the IP and Ethernet sector include the robust expansion of wireless communication protocols, increased adoption of secure network protocols by enterprises, and the rapid global growth of internet services. This surge in IP and Ethernet technologies is expected to fuel the demand for optical transport networks, as they play a crucial role in transporting IP packets effectively. As an illustration, a May 2022 study by HMS Networks, a Sweden-based communication device company, forecasts an 8% growth in the industrial network market in 2022, with industrial Ethernet experiencing the highest growth rate at 66%. This underscores the significant impact of the rapid growth of IP and Ethernet on driving the demand for optical transport networks throughout the forecast period.

The rising prevalence of remote work is expected to be a significant driver for the growth of the optical transport network (OTN) market in the foreseeable future. Remote work, characterized by employees performing their job responsibilities outside the traditional office setting, necessitates robust high-bandwidth optical transport networks to ensure seamless and efficient data transmission. This is particularly crucial for activities such as video conferencing and file sharing, which are common in remote work scenarios. For example, as of September 2022, a report from the United States Census Bureau highlighted that nearly half of the workforce in the District of Columbia, comprising 48.3%, engaged in remote work in 2021. This marked the highest percentage of home-based workers among states and comparable entities. Notable contributors to this shift included states such as Washington (24.2%), Maryland (24.0%), Colorado (23.7%), and Massachusetts (23.7%). Consequently, the increasing prevalence of remote work stands as a significant factor driving the growth of the optical transport network market.

The optical transport network market is experiencing a significant trend toward technological advancement, with major companies prioritizing the provision of cutting-edge solutions to meet evolving customer demands and fortify their market presence. These companies are integrating next-generation technologies into their network systems, encompassing innovations such as time-division multiplexing (TDM), electrical multiplexing, optical amplification technology in conjunction with wavelength division multiplexing (WDM), coherent digital technology, artificial intelligence, data centers, and photonic integrated circuits. These advancements aim to enhance the transmission of information carried through optical cables. An illustrative instance is observed in March 2022 when Nokia Corporation, a telecommunications company based in Finland, introduced a next-generation Optical Transport Network (OTN) architecture tailored for wholesale services. This architecture features new client interfaces supporting 400GE service transport, offering an array of robust and flexible isolation capabilities through both hardware and software for effective network slicing. This strategic initiative underscores the commitment of major players to leverage advanced technologies and innovation, thereby elevating the capabilities of optical transport networks to meet the escalating demands of the industry and its consumers.

Major players in the optical transport network market are spearheading innovation by introducing comprehensive solutions such as OTN suites, aimed at catering to larger customer bases, amplifying sales, and driving revenue growth. An illustrative example unfolded in April 2021 when Radius Telecoms Inc., a telecommunications company based in the Philippines, unveiled its Optical Transport Network Suite. This suite stands out for its adoption of cutting-edge network protocols, representing an industry-leading approach to multiplexing various services over optical light paths. Notably, it employs an efficient and globally recognized method, enhancing the multiplexing capacity with a remarkable capability of up to 200 Gbps. This advancement revolutionizes multiplexing by boosting lambda capacity and wavelengths per fiber, thereby enabling Radius Telecoms to deploy cost-effective solutions. This innovation provides a dynamic platform for customer management while facilitating the efficient delivery of differentiated services, reinforcing Radius Telecoms' position in the market through enhanced service offerings and operational efficiency.

In April 2021, Belden Inc., a U.S.-based manufacturer specializing in networking, connectivity, and cable products technologies, successfully acquired OTN Systems N.V. for an approximate sum of $71 million. The primary objective behind this acquisition is to enhance Belden's Customer Innovation Center (CIC) initiatives and create substantial business synergies in the areas of products, new technology, and commercial operations. OTN Systems N.V., based in Belgium, is a company that offers telecommunications solutions specifically tailored for industrial customers.

Major companies operating in the optical transport network market report are Huawei Technologies Co. Ltd., Cisco System Inc., Fujitsu Inc., Telefonaktiebolaget LM Ericsson, Nokia Corporation, Alcatel Lucent SA, NEC Corporation, ZTE Corporation, FiberHome Telecommunication Technologies Co. Ltd., Ciena Corporation, Coherent Corporation, Infinera Corporation, Coriant GmbH Co. KG, ECI Telecom Ltd., Tellabs Inc., Acacia Communications Inc., ADVA Optical Networking SE, Oplink Communications Inc., Ekinops S.A., Inphi Corporation, Cyan Inc., PacketLight Networks Ltd., MRV Communications Inc., Xtera Communications Inc., Sorrento Networks Corp., Transmode Ltd., Oclaro Inc., Optelian, BTI Systems Inc., Macom Technology Solutions Holdings Inc., Applied Optoelectronics Inc., Lumentum Holdings Inc., Juniper Networks Inc., Viavi Solutions Inc, Arista Networks Inc., EXFO Inc.

North America was the largest region in the optical transport network market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the optical transport network market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the optical transport network market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary components within the optical transport network market include the optical switch and optical packet platform. The optical packet platform serves as a versatile aggregation and transport infrastructure, supporting current and future Ethernet and IP services universally. Technological segments encompass Wavelength Division Multiplexing (WDM) and Dense Wavelength Division Multiplexing (DWDM). Services such as network design and network support find application across significant sectors such as IT and telecom, healthcare, government, and other verticals in various industries.

The optical transport network market research report is one of a series of new reports that provides optical transport network market statistics, including optical transport network industry global market size, regional shares, competitors with an optical transport network market share, detailed optical transport network market segments, market trends and opportunities, and any further data you may need to thrive in the optical transport network industry. This optical transport network market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The optical transport network (OTN) market includes revenues earned by entities by providing various optical transport network services such as optical switches management, transport and packet platforms, network designing, network optimization, maintenance, and support of network to enhance orbital angular momentum (OAM) wavelength, transport transparency of customer traffic, performance monitoring, fault detection, and other related services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.