Optical Transport Network – The Next Generation Digital Wrapper
The optical transport network market was valued at US$24.161 billion in 2020 and will increase to US$75.937 billion by 2027. Over the forecast period, this market is estimated to increase at a compound yearly growth rate of 17.77%.
The Optical Transport Network (OTN) is a protocol that enables transport to become as essential as computation and storage in intelligent data center networking by making the network an open and customizable platform. OTN is a network-wide framework that allows Wavelength Switched Optical Network (WSON), SONET/SDH-like functionality. It allows for the creation of a new and advanced transparent and hierarchical network that can be used on both WDM/WSON and TDM devices. OTN is a protocol for conveying network communications across optical fiber networks, to put it another way.
According to analysts, the growing demand for bandwidth-oriented applications in various industries will be the driving force behind the market's robust growth over the forecasted timeframe.
The unexpected increase in household and corporate internet users has created a new level of bandwidth demand in the network world. Because of the rising use of digital games, social media platforms, web conferencing, and many other real-time streaming activities, there has been a large uptake among residential users. One of the main reasons for the market's rising traction is that it provides smooth data transmission and eliminates latency difficulties. Moreover, corporate customers, particularly financial companies and government entities, have seen significant growth in bandwidth requirements. Furthermore, due to the increasing pressure on current networks, companies have found it challenging to implement and manage their advanced systems. Latency, bandwidth limitation, robust management, transparent client signals, better scalability, and global acceptability as a standard are all difficulties that the current Synchronous Optical Network (SONET)/ Synchronous Digital Hierarchy (SDH) networks have. As a result, it is quickly displacing SDH/SONET worldwide.
Moreover, over the next few years, cable operators will confront several architectural and technological crossroads, including how they migrate to a DAA and the many other alternatives given by the future evolution of their HFC networks. On the economic side of their operations, a more pressing transformation is underway: the progressive replacement of television services with high-speed broadband as the cable industry's principal income generator. Optical solutions are thus necessary, and these operators are expected to profit from them. For instance, in February 2022, China Mobile and Huawei agreed to develop an optical network connecting Guangdong, Hong Kong, and Macao. "The world's largest green all-optical switching hub network," according to Huawei. Huawei and China Mobile Guangdong have collaborated on an all-optical network cluster for the Greater Bay Area in recent years.
The optical transport network's market expansion could be hindered by the high cost of maintenance associated with it.
Although the market for optical transport networks is expected to increase significantly during the projected period, the initial deployment costs are higher. As a result, the communications market's small businesses avoid embracing such products and solutions. The market's high initial cost may prevent it from reaching its full potential. Aside from that, there are unpredictable traffic patterns and high bandwidth requirements. These factors stifle the market for optical transport networks (OTNs). Other concerns include the widespread use of the internet by misguided individuals. Data theft, hacking, internet scamming, and data disfiguration are all on the rise.
During the projected period, the DWDM segment is expected to grow rapidly in the optical transport network market.
By Technology, the optical transport network market can be segmented into Converged Packet Optical Transport System, DWDM, and WDM. The fiber-optic transmission technology DWDM stands for Dense Wavelength Division Multiplexing. The procedure entails multiplexing numerous wavelength signals onto a single fiber. As a result, each fiber contains a series of parallel optical channels, each of which uses slightly different light wavelengths. DWDM has a higher transmission performance than WDM. DWDM can simultaneously transport data at speeds ranging from 2.5 to 10 Gbps over 160 channels. Furthermore, DWDM has channel spacing of 25 to 50 GHz and can sustain transmission rates of more than 1 Tbps. As a result, the DWDM segment of the optical transport network market is expected to offer a plethora of attractive business prospects to industry participants.
During the forecast period, the optical transport network market in the Asia Pacific is predicted to have a dominating share.
The optical transport network market is classified into five regions based on geography: North America, South America, Europe, the Middle East, Africa, and the Asia Pacific. The Asia Pacific market is expected to account for the largest revenue share in the global automated power factor controller market over the projected period. Plant and machinery digitalization is progressively gaining traction in Southeast Asian countries. This has accelerated data traffic in several countries. Nokia was chosen by Allo, a Malaysian information and communications technology service provider, to implement a gigabit fiber network in the states of Melaka, Johor, Negeri Sembilan, and the East Coast of Malaysia in May 2021, in line with Malaysia's The Jalinan Digital Negara Plan, part of the 12th Malaysia Plan (2021-2025), to provide elevated broadband to two million homes and drive the digital economy. Furthermore, TPG Telecom, an Australian operator, became the first network operator in the Asia-Pacific area to implement a modular 4G/5G Smart Node solution from a top communications technology provider in October 2021. In addition, developing countries like India and Pakistan are investing in contemporary infrastructure to support the digital economy and technological breakthroughs. Pakistan's state-owned PTCL (Pakistan Telecommunications Company Limited) cooperated with Huawei in June 2021 to modernize its IP Edge and Optical Transport Network (OTN) infrastructure.
Covid-19 Insights
The impact of COVID-19 on the optical transport network business has been significantly positive. The pandemic has raised the demand for digital communication, and faster bandwidth is now more important than ever. During the lockdowns and physical restrictions, the adoption of remote work culture, distance learning, cloud technologies, and social media has only increased. The telecommunications industry is under more strain than ever before. As a result of innovations and significant R&D investment, the OTN market has grown significantly during these difficult times.
