The market research firm Ovum has published a new report, which forecasts record level growth for FTTx optics in 2015. The record growth in 2015 is followed by a record-breaking 2014. The report forecasts that FTTx optical components revenue will exceed $1 billion this year showing a year-to-year growth of 4.93 percent. In 2014, the revenue was $953 million. Ovum says the market will remain strong for 2016 as well, with a forecast revenue of $985m. Demand for PON equipment – both OLTs and ONTs – is driving the FTTx optics market to record levels.
Ovum says numerous positive factors are driving the FTTx optics market to new levels, including FTTH network deployments by China Mobile and the continued network builds by China Telecom and China Unicom. China alone is the biggest consumer of fiber optic products as the fiber optic projects by Chinese service providers are at the peak.
Other positive trends contributing to the strong growth are FTTx network deployments by North American MSOs, Google Fiber’s expansion plan, US telco deployment plans, European deployment plans, continued deployments in the Middle East, small deployments in South and Central America and Africa, and the movement toward FTTP or FTTH. Fiber to the home deployments requires more PON ONT optics.
Key forecast findings of Ovum’s report are:
– Total OLT transceivers will reach 6.5 million in 2015, an increase of 19% in 2014.
– Next-generation OLT transceivers represent over 12% of the total OLT transceiver market in 2020, with 10G EPON OLTs representing the largest segment within next-gen PON.
– The total ONT transceiver/BOSA market will exceed $71 million in 2015, an increase of 18% from 2014.
Next-gen ONT transceivers/BOSAs are forecast to represent just over 9% of the total ONT transceiver/BOSA market in 2020 with 10/1 and 10/10 EPON ONTs representing the largest segment within next-gen PON.
Ovum’s PON optical components forecast does not include any large FTTx deployments in the heavily populated countries of India, Brazil, and Indonesia. Large deployments in these countries would provide a significant uptick to the units forecast and consequently to revenues, as would faster deployments of next-gen PON because the ASPs for next-gen PON optics are higher than those for non-next-gen, says Ovum.
The largest potential downside to the forecast could come from a slowdown in FTTx deployments by the Chinese operators. China is the single largest consumer of PON optics in the world and any slowdown would negatively impact the forecast. However, Ovum believes that China’s newest operator entrant into FTTx, China Mobile, is well-positioned to deploy an FTTx network, bring existing mobile customers onto its new wireline broadband network, and offer additional services.
This strong outlook benefits Japanese optical subcomponent vendors such as laser and lens manufacturers. Meanwhile, the wireline broadband FTTx market upswing is having a positive impact on component and equipment vendors.
Ovum is a leading global technology research and advisory firm. Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries. Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for technology business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate, and insightful market data, research, and consulting. With 23 offices across six continents, Ovum offers a truly global perspective on technology and media markets and provides thousands of clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits, and opinion. In 2012, Ovum was jointly named Global Analyst Firm of the Year by the IIAR.
Ovum is a division of Informa plc, one of the leading business and academic publishing and event organizers globally, headquartered in London. Informa is quoted on the London Stock Exchange.