The heavily consolidated global passive optical LAN (POL) market is dominated by Huawei Technologies Co. Ltd., ZTE Corporation, and Alcatel-Lucent SA. These three companies accounted for close to 75% of the global passive optical LAN market in 2015 and are likely to retain a dominant share in the market in the coming years. Huawei, the market leader, has consistently focused on business expansion and capacity expansion in order to attract new customers. This is likely to remain a popular strategy among players in the passive optical LAN market.

Establishing an association with the development of 4G framework across the world is another key tactic for players in the passive optical LAN market. Huawei has made use of LTE networks as a key growth tool and has, as a result, acquired a steady foothold in emerging telecom markets such as India and Brazil. On the other hand, Alcatel-Lucent SA has focused primarily on technological advancements for existing product configurations rather than new product development as the key strategy to pursue.

According to Transparency Market Research (TMR), the global passive optical LAN market is expected to exhibit a robust 22.9% CAGR from 2016 to 2024, with the market’s valuation set to rise to close to US$103.5 bn during the period.

Consistent Application of POL in SONET/SDH to Drive Demand

The key application segments of the global passive optical LAN market are interoffice, loop feeder, SDH, SONET, HFC, and FITL. Of these, SDH and SONET are likely to remain the leading segments of the passive optical LAN market. SDH and SONET are data transport protocols that are getting widespread attention due to their capacity to facilitate smooth voice conversation. SDH and SONET are expected to account for more than 50% of the global passive optical LAN market in the coming years and collectively could be valued at close to US$60 mn by the end of 2024.

Regionally, Asia Pacific is likely to account for a significant part of the global passive optical LAN market. The market is expected to remain the regional leader in the global market through the 2016-2024 forecast period and rise to a valuation of US$40.5 bn. North America is also likely to remain a key regional market for passive optical LAN technology and is expected to account for more than a quarter of the global market through the forecast period.

Need for Increasing Bandwidth Drives Demand for Passive Optical LAN Equipment

One of the prime drivers for the global passive optical LAN market is the steady increase in the need for bandwidth. Due to the rising amount of data being generated by online activities across the world, and the rising number of Internet users, particularly in developing economies, the demand for passive optical LAN equipment is likely to exhibit consistent growth over the coming years. The ubiquitous use of IP-based communication methods in the corporate sector is also likely to drive the need for bandwidth in the coming years, leading to steady expansion of the global passive optical LAN market.

The energy efficiency benefits of installing passive optical LAN equipment are likely to be among the key drivers for the global POL market. Energy expenditure is becoming a key concern for several end users of passive optical LAN equipment, making its impact crucial for the POL market. The beneficial effect of the use of passive optical LAN on energy expenditure is a part of its comprehensive impact on the user’s overall economic structure due to its high return on investment.

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