The optical communication systems and networking market size is predicted to reach USD 32.94 billion by 2029 and exhibit a CAGR of 7.09% during the forecast period. The global market size stood at USD 19.26 billion in 2021 and USD 20.39 billion in 2022. Fortune Business InsightsTM has presented this information in its report titled, “Optical Communication Systems and Networking, 2022-2029”. Optical communication systems and networking are communication systems that convey information between two or more sites using light signals rather than electronic signals. Computers in offices, huge cities, or even nations in the global telecommunications system could be the points. Optical networking systems, which include optical fiber, optical amplifiers, lasers, switches, routers, and other related technologies, are used in modern communication. It operates by converting an electrical signal received from a network node into light pulses, which are then placed on a fiber optic cable and transmitted to a receiving device. 



On the basis of components, the market is divided into optical transceivers, optical fiber, optical switches, optical amplifiers, optical sensors, optical circulators, and others. On the basis of technology, the market is fragmented into WDM, SONET, fiber channel, and others. On the basis of vertical, the market is segmented into IT & Telecom, BFSI, aerospace & defense, healthcare, energy & utilities, and others. By data rate, the market is divided into up to 40 GBPS, greater than 40 GBPS to 100 GBPS and greater than 100 GBPS. Geographically, the market is classified into Europe, North America, Asia Pacific, and the Rest of the World.

Report Coverage-

The market report on optical communication systems and networking gives a thorough overview of the industry, focusing on major factors such as well-known manufacturers, products, demanding technologies, and end-users. It also provides information on optical communication technologies and networking trends, as well as major industry advances. The market study includes various direct and indirect variables that have contributed to the industry's growth in recent years, in addition to the factors listed above. To transmit telephone signals, Internet communication, and cable television signals, many telecommunications businesses use optical communication systems and networking systems.

Drivers & Restraints-

Market Growth is Expected to Be Augmented by Optical Solutions in Telecom Industry

Optical fiber provides benefits over copper in terms of attenuation and interference, allowing wireless telecommunications networks to be created over considerably longer distances. Substantially larger data speeds may now be accommodated thanks to much lower levels of transmission medium loss and, perhaps most importantly, fiber optical communications. Optical solutions in the telecom industry are widely used for applications ranging from big telecommunications backbone infrastructure to major telecom backbone infrastructure as a result of these advantages. Furthermore, the rising demand for military communication equipment and the increasing defense budget is expected to contribute a major portion of the market in the approaching years.For example, global defense spending has increased at the fastest rate in a decade. The U.S. defense budget in 2021 will be USD 778 billion, up 4.4 % from 2019. The U.S., as the world's top defense spender, contributed for 39% of overall defense spending in 2020.

The complicated architecture of these optical networking solutions has resulted in a high initial setup and maintenance cost, which may hamper the global optical communication systems and networking market growth.

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Regional Insights-

Asia Pacific Led the Global Market Owing Several OEMs Presence

In 2021, the Asia Pacific market was worth USD 6.91 billion. In the base year, Asia Pacific led the market, and it is expected to continue to do so throughout the projection period. Several OEMs' presence in South Korea, Japan, China, India, and Australia is predicted to boost market growth between 2022 and 2029. Furthermore, the expanding smart city initiatives, as well as the developing telecommunications, defense, healthcare, aviation, and semiconductor sectors in the aforementioned countries would promote market expansion throughout the projection period.

In the base year, North America had the second-largest optical communication systems and networking market share. The market in North America is expected to develop due to the increased implementation of advanced optical technologies such as quantum optics in defense, aviation, industry, and commerce. Furthermore, high defense spending and the presence of numerous important competitors in the U.S. are assisting in the expansion of the market in North America.

During the forecast period, the market for optical communication systems and networking in Europe is expected to develop modestly. Europe's market growth is predicted to be driven by the expanding aerospace, healthcare, automotive, and manufacturing industries in the U.K., France, and Germany. To reclaim Europe's worldwide leadership in the aviation industry, there is a clear and urgent need to invest in creating new technology.

Due to supply chain disruptions, the Rest of the World has seen sluggish growth during pandemics. However, in the coming years, a rise in the use of photonics solutions to establish new infrastructure in Saudi Arabia and the UAE will generate profitable growth prospects in the industry. The UAE's and other adjacent countries' increasing investment in aviation and defense activities is expected to provide attractive growth prospects in the near future.

Competitive Landscape-

Product Innovations and Long Term Government Contract to be the Focus of Key Players

The dominance of chosen firms like Ciena Corporation, Arista Networks, and Cisco Systems, Inc. may be seen in the competitive landscape of optical communication systems and networking industry. Consistent R&D spending, a strong focus on product innovation, and long-term contracts with government and authorized entities will help these businesses maintain their market position. In January 2022, for example, ADTRAN and ADVA merged to form a prominent global, scaled provider of end-to-end fiber networking solutions for communications service providers, enterprises, and government customers.

Key Industry Development-

December 2021: Under phase zero of the Space Space-Based Adaptive Communications Node (Space-BACN) program, the U.S. Defense Advanced Research Projects Agency (DARPA) awarded a contract to Mynaric, a space-based laser communication technology company, to create a novel optical communications terminal.

List of Key Market Players:

  • ADTRAN, Inc. (U.S.)
  • ADVA Optical Networking (Germany)
  • Arista Networks (U.S.)
  • Broadcom Inc. (U.S.)
  • Ciena Corporation (U.S.)
  • Cisco Systems, Inc. (U.S.)
  • Corning Incorporated (U.S.)
  • FiberHome (China)
  • Finisar Corporation (U.S.)