Dynamics of Passive Optical Network Equipment Market in India

With rising competition already a characteristic of the Indian networking market, network providers are looking at ways to provide the best speed and connectivity options to the Indian consumer. The telecom industry, the forerunner of most networking modules, has made a rapid switch from the traditional coaxial cable and digital subscriber line connections structure to more effective fiber optic connectivity methodologies. Fiber optics are considered to be the future of telecom and networking and methodologies such as Fiber-to-the-home (FTTH) or Fiber-to-the-premise (FTTP) are becoming the gold standard for networking these days.

Passive optical networks (PON), a variety of FTTH/FTTP networks, are gaining increased attention due to their many benefits in terms of installation and maintenance costs. The rising demand for passive optical networks in the country has led to a flourishing market for global passive optical network equipment market.

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What is leading to increased demand?

Indian markets in all the fields related to network connectivity have observed huge development in the past few years. Three reasons can be considered the most significant drivers of this growth:

The rising number of small and medium sized IT enterprises

Rising modernization of traditional IT infrastructure in every industry

Rising home internet connections in the country

India, the second most populous country in the world and a rapidly expanding economic force, has always remained one of the most extensive takers of new technologies across the globe. India’s telecommunications and networking industries are amongst the biggest around the globe. While the country’s commercial sector is amongst the first adopters of telecom and networking methodologies, the demand for internet connectivity is rapidly rising in the domestic sector as well.

It is estimated that there were more than 150 million users of the internet in the country and the number is expected to rise to 500 million in the next two years. As such, the market is expected to present huge growth opportunities for the global networking market. In the enterprise sector, too, the networking market is expected to observe strong demand and grow at an excellent pace.

Why Fiber Optics?

Fiber-to-the-home (FTTH) or Fiber-to-the-premise (FTTP) broadband connections, the fiber optic cable connections, have many benefits over traditional ones such as coaxial cable, twisted pair, or digital subscriber line connections. Not only do these connections provide far more carrying capacities and faster data transfer speeds, but they also lead to an overall reduction in maintenance and installation costs due to the longevity of fiber optic cables. However, it is due to the rising pressure for better connectivity that providers and users are looking at FTTH/FTTP connections as the potential solutions.

Of the two key types of FTTH/FTTP networks, passive optical network (the other one being active optical network), has observed increased popularity due to its benefits such as low total cost of ownership, high returns, advanced security, and simplified network applications. Owing to their nature of sharing fiber optic strands for larger parts of the network as compared to the need for a dedicated fiber per house or setting with an active optical network system, passive optical networks use less fiber optic cables and bring a big reduction in networking costs. Passive optical networks also have much lower maintenance costs owing to the fewer electric or moving parts in the network, making for a network where not a lot can go wrong.

Dynamics of Passive Optical Network (PON) Equipment Market in India

A report published by Transparency Market Research analyzing the Indian market for passive optical network equipment states that the market will observe tremendous growth in the near future. From a net value of US$268.6 million in 2013 to US$1,175.5 million by 2020, the market will grow an amazing 21% CAGR over the period. Volume-wise, the market is expected to grow at a 15.7% CAGR over the same term, leading to a demand rise from 7.1 million units in 2013 to 38.3 million units by 2020.

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