Growing Data Consumption, Driving Demand for Fiber Optic Components

By Shiv Sharma | CEO | Syrotech Networks Ltd.

Growing Use in Telecom and Mobile Industry Drives Demand for Fiber Optic Components. The global market for Fiber Optic Components is projected to reach US$15.9 billion by 2020, driven by growing bandwidth requirements as a result of robust mobile broadband penetration.

Since the launch of Internet in the 1990s, the modern day economies, societies, and businesses have become increasingly dependent on uninterrupted global data connectivity.

Relentless demand for higher bandwidth speed and wider reach has transformed the cabling technology. Advent of fiber optics, in particular, has revolutionized the market for cables. Fiber optics technology refers to the method of transfer of data, voice and pictures through the transmission of light via thin transparent fibers.

Fiber optics has the advantage of transmission of data without any attenuation, and is seldom impacted by electromagnetic interference, consequently offering integrated and accurate data. These cables are increasingly replacing metal wires as the latter results in loss of data during transmission.

Fiber optics has the ability to offer high speed, agility, and accessibility, which are essential for the provision of next generation data services such as, online gaming, IP VOD, and video-calling.

The massive data explosion triggered by bandwidth heavy multimedia content, use of advanced applications, and faster network servers are all contributing to traffic congestion, thereby creating a dire need for networks to support high transmission speeds.

This need is expected to continue gathering momentum with businesses adopting latest networking technologies, such as data warehousing, cloud computing, server virtualization, all of which have higher storage needs, and bandwidth-hogging applications.

As fiber optic components embody the core of telecommunications industry, dynamics of the telecom industry have a profound impact on the fiber optic components market.

Optical fibers offer unmatched transmission bandwidth with very low latency and therefore have become a highly popular transmission medium for high data rate and long distance transmission in telecom networks.

They have been gaining widespread use due to increasing commercial and consumer demand for faster Internet services and greater telecom capacity. Over the years, technological advancements have made possible the transfer of data through a single optical fiber over long distances. Also, the transmission capacity of these communication networks has been significantly enhanced by leveraging wavelength division multiplexing.

Advancements in cabling technology, over the years, have resulted in significant growth in demand for fiber optic components such as transceivers, optical amplifier, coupler/splitters, WDM multiplexer and de-multiplexers, filter, isolator, circulator, attenuator, optical switches, and wavelength converters, among others.

The ongoing transition to high-speed fiber optic networks, like 40 and 100 Gbps networks, is also likely to continue well into the future spawning opportunities for fiber optic components.

Liberalization of regulatory regimes in several countries and support from government for deployment of FTTH/B bode well for the market. The emergence of FTTH as an effective solution to fulfill the current and future data demands of a wired home network is poised to benefit market growth.

Asia-Pacific and Latin America present huge growth opportunities supported by the continuous rise in the number of fixed broadband subscribers. India and China especially are expected to witness rapid growth in the coming years as a result of the strong emphasis placed on the indispensability of fiber optic deployments.

India and China are considered as the most promising market for fiber optic components, owing to the escalating demand for faster bandwidth as well as the untapped opportunities offered by the country’s huge population base.

Fiber optic transmitters/receivers represent the largest product market. Fiber optic couplers market is forecast to register the fastest CAGR of 11.4% over the analysis period.

Fiber optic connectors market will be driven by increased deployment of next-generation networks in the telecom industry, government supported investments in fiber optical networks, and increasing trend towards smaller and multi-fiber connectors installed closer to end users.