Global Coherent Optical Equipment Market Grows Steadily at a CAGR of 7.8%

Introduction

Coherent optical equipment offers a high degree of flexibility in optical networking. It supports various modulation formats, allowing network operators to adapt to different transmission requirements and optimize the performance of their networks. These modulation formats include quadrature amplitude modulation (QAM), polarization division multiplexing (PDM), and orthogonal frequency-division multiplexing (OFDM), among others. The flexibility provided by coherent optical equipment enables operators to dynamically adjust their optical networks' data rates, spectral efficiency, and reach based on specific application needs and network conditions.

Furthermore, coherent optical equipment is compatible with existing fiber-optic infrastructure, making it a cost-effective solution for upgrading and expanding optical networks. It can seamlessly integrate into existing networks without major infrastructure changes or disruptions. This compatibility allows network operators to leverage their existing fiber-optic assets and maximize the return on their investments while benefiting from the enhanced capabilities of coherent optical communication.

Market Dynamics

Rise in Access to High-Speed Bandwidth Drive the Global Market

Several factors drive the global coherent optical equipment market, and one significant driver is the rise in access to high-speed bandwidth. With the increasing demand for data-intensive applications and services such as video streaming, cloud computing, online gaming, and IoT devices, there is a growing need for high-speed connectivity to support these activities. Coherent optical equipment enables the transmission of large volumes of data at high speeds over long distances, making it a critical technology for meeting the requirements of bandwidth-intensive applications. As access to high-speed broadband networks expands globally, there is a corresponding need for advanced optical communication infrastructure to deliver the necessary bandwidth.

Expansion of Network Infrastructure in Rural Areas Creates Tremendous Opportunities

Expanding network infrastructure in rural areas presents significant opportunities for the global coherent optical equipment market. While urban areas have typically been the focus of network development, there is a growing recognition of the need to bridge the digital divide and provide reliable high-speed connectivity to rural communities. Coherent optical equipment is vital in extending network infrastructure to rural areas. Its ability to transmit data over long distances with high capacity and low latency makes it well-suited for deploying optical communication systems in remote locations. By leveraging coherent optical equipment, service providers and network operators can overcome the challenges associated with long-haul connectivity and effectively extend high-speed broadband services to underserved rural areas.

Expanding network infrastructure in rural areas represents a significant opportunity for the coherent optical equipment market. By leveraging the capabilities of coherent optical equipment, service providers can extend high-speed connectivity to underserved areas, enabling access to essential services, driving innovation, and promoting sustainable development. This presents a promising growth avenue for coherent optical equipment manufacturers and vendors to cater to the increasing demand for rural connectivity worldwide.

Regional Analysis

North America is the most significant global coherent optical equipment market shareholder and is estimated to grow at a CAGR of 7.4% over the forecast period. The dominance of North America in the coherent optical equipment market can be attributed to several factors. Firstly, the region has a well-established and highly developed telecommunications infrastructure, driven by the presence of major technology and communication companies. The demand for high-speed data transmission, driven by factors such as cloud computing, video streaming, and IoT applications, has fueled the adoption of coherent optical equipment in the region.

Secondly, North America is at the forefront of technological advancements and innovation, with significant investments in research and development. This has enabled the region to lead in deploying advanced optical communication technologies, including coherent optical equipment. The continuous development of high-capacity and high-performance optical networks in North America further drives the demand for coherent optical equipment.

Europe is anticipated to reveal a CAGR of 8.2% over the forecast period. Several factors contribute to the projected growth of Europe's coherent optical equipment market. Firstly, Europe is home to several technologically advanced countries with well-established telecommunications infrastructure. These countries, including Germany, France, and the United Kingdom, have witnessed increasing demand for high-speed data transmission and bandwidth-intensive applications, driving the adoption of coherent optical equipment.

In addition, Europe is witnessing a surge in data center construction and expansion, driven by the growing demand for cloud computing, digital services, and IoT applications. Data centers require high-capacity and reliable connectivity to handle the massive volumes of generated data. Coherent optical equipment offers the necessary infrastructure to support efficient data transmission within and between data centers, thus facilitating the growth of the data center industry in Europe.

Key Highlights

• The global coherent optical equipment market size was valued at USD 14.55 billion in 2022. It is estimated to reach USD 28.60 billion by 2031, growing at a CAGR of 7.8% during the forecast period (2023–2031).
• Based on technology, the global coherent optical equipment market is bifurcated into 100G, 200G, 400 G+, and 400G ZR. The 100G segment dominates the global market and is projected to exhibit a CAGR of 7.2% over the forecast period. 
• Based on equipment, the global coherent optical equipment market is bifurcated into wavelength-division multiplexers (WDM), modules/chips, test and measurement equipment, optical amplifiers, optical switches, and others. The wavelength-division multiplexer segment dominates the global market and is projected to exhibit a CAGR of 7.2% over the forecast period. 
• Based on application, the global coherent optical equipment market is bifurcated into networking, data center, and original equipment manufacturer (OEM). The networking segment dominates the global market and is projected to exhibit a CAGR of 7.2% over the forecast period.
• Based on end-users, the global coherent optical equipment market is bifurcated into service providers, the public sector, and industries. The service providers segment dominates the global market and is projected to exhibit a CAGR of 7.9% over the forecast period.
• North America is the most significant global coherent optical equipment market shareholder and is estimated to grow at a CAGR of 7.4% over the forecast period.

Competitive Players

Competitive Players

The key players in the global coherent optical equipment market are Automation Anywhere, Inc., Blue Prism Limited, HCL Technologies Limited, Hewlett Packard Enterprise Company, International Business Machines Corporation, Kofax Inc., Microsoft Corporation, Nice Robotic Automation, Pegasystems Inc., and UiPath.

Recent Developments

Market News

• In June 2023, ADVA Optical Networking announced that it had received an order from a major telecommunications service provider in Europe for its XGS-PON coherent optical transport portfolio. The order includes the company's FSP 3000 XGS-PON transponders and A1000 coherent optical network manager (MON).
• In June 2023, Nokia announced that it had completed the acquisition of Adtran, a leading provider of optical networking solutions. The acquisition will strengthen Nokia's position in the global coherent optical equipment market and enable it to offer its customers a wider range of solutions.

Segmentation

Global Coherent Optical Equipment Market: Segmentation

By Technology

• 100G
• 200G
• 400G+
• 400G ZR

By Equipment

• Wavelength-division Multiplexer (WDM)
• Modules/Chips
• Test and Measurement Equipment
• Optical Amplifiers
• Optical Switches
• Others

By Application

• Networking
• Data Center
• Original Equipment Manufacturer (OEM)

By End-User

• Service Provider
• Public Sector
• Industries

By Region

• North America
• Europe
• Asia-Pacific
• LAMEA