LightTrends

 

Despite modest growth, sales of FTTx and wireless infrastructure optics will total almost $10 billion over the next 5 years.

 

LightCounting releases a new report titled “Next-Generation Access Optics”

 

The combined FTTx and mobile fronthaul and backhaul markets will consume more than 115 million optical devices in 2016, worth some $1.7 billion in revenue to components makers. Close to 70% of these products will be deployed in China. However, demand for access optics in China is projected to moderate in 2017-2021, since FTTH and 4G LTE upgrades are nearing completion. Access infrastructure projects in developing countries and deployments of next generation optics in the developed world, including China, are projected to sustain market growth in 2017 and beyond.

Global sales of optics for mobile infrastructure and FTTx are projected to exceed $2 billion by 2021 with the contribution of China declining to 50%. Despite modest growth forecasted for this market segment, it will remain a significant opportunity for suppliers, adding up to nearly $10 billion over the next 5 years, as illustrated in the figure below.

Figure 1: China as a percent of worldwide sales of access optics, 2017-2021


Chinese service providers will continue to invest in networking infrastructure, but their priorities are shifting from deployments of FTTH and wireless fronthaul optics to adding bandwidth in metro-access and metro-core networks. While China became number one in the world in terms of the number of FTTH and 4G LTE subscribers, the actual speed of Internet access in China remains below the global average. Lack of bandwidth in metro networks is considered a bottleneck and the government is urging service providers to resolve this problem.

China has what could be the best environment for a healthy access optics demand of any country. It has the world’s largest population, living in largely urban settings, with a central government willing to spend large amounts of money on infrastructure such as internet access. While some small countries have achieved much higher penetration rates of FTTx and mobile broadband, the other large countries have relied to a great extent on market forces to direct investment in fixed and mobile broadband. As a result, China has been and will remain the largest single-country market in terms of consumption of both wireless and fixed access optics for the next five years.

None of the other countries in the world will be able to replicate the scale of FTTH and 4G LTE deployments in China over the last 3 years. The scale of FTTH projects planned in India and Indonesia are at least 10 times smaller. However, the developing countries collectively are projected to make a significant contribution to the global market for access optics in 2017-2021. Chinese equipment manufacturers are likely to take a lead in facilitation of these projects around the world, exporting their expertise and technology. With many Western democracies becoming wary of globalization, China’s assistance will be welcomed by the developing world.

Deployments of 5G mobile infrastructure is projected to start in 2020 and it will give a boost to the wireless fronthaul market. However, it is very likely that CPRI connections will be replaced with retimed Ethernet, which requires less bandwidth. This change in fronthaul connectivity limits the prospects for high speed optics sales growth for this application.

LightCounting’s “Next-Generation Access Optics” report is a consolidation and update of two previously separate LightCounting reports: Next-Generation FTTx Optics, published in July 2015, and Mobile Fronthaul Optics, published in November of 2015. The two subjects are now addressed in one report because for the first time, the convergence of wireless fronthaul and residential broadband access networks seems likely, due to the continued growth in Internet traffic, the advent of the Internet of Things, and the development of 5G mobile technology.

This report gives our outlook on future optical access networks, including architectures, service provider deployment strategies and trends, component requirements, and the products needed. Leading vendors of access components are profiled, and historical transceiver shipment trends are explained. Acronyms, and pictorial guides to mobile fronthaul and FTTx networks are included as well. A detailed Excel spreadsheet accompanies the report, providing a five-year forecast of fronthaul, backhaul, and FTTx optics shipments, prices, and revenues, broken down by speeds, reaches, and colors. More information on the report is available at: “Next-Generation Access Optics”.

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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.