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From the past few years, optical fiber-based communication has proven to be a cost-effective way to reach customer premises to provide variety of managed residential and business services. The optical network terminal (ONT) portfolio offers an extremely scalable and broad solution. The ONT platform provides a cost-effective and flexible way for optical fiber access, over passive or active optical network architectures.
An optical network terminal (ONT) is a network interface device (NIDs) that used fiber to the premises applications. The ONT is used for terminating the fiber optic link, demultiplexing the signal into various components such as television, voice telephone, and internet access, and delivering power to customer telephones. Digitization has augmented the demand for reliable and safe network solutions that are eco-friendly and cost-effective at the same time. Thus, the increased demand for secure and reliable network solutions would be likely to drive market growth in the coming years.
Moreover, widespread adoption of the internet of things (IoT), cloud-based services, and ongoing technological advancements are probable to fuel the optical network terminal equipment demand. Apart from this, growing investment for private and public sectors on research and development activities would likely create profitable opportunities for the market to grow. For instance, in April 2020, AT&T Inc. boosted its capital expenditure to USD 5 billion for investments in optical fiber and 5G infrastructure.
The growing need for a faster network and rapid developments in network technologies is expected to fuel the market growth. Further, the rising internet penetration and telecom services with the rising demand for bandwidth has boosted ONT equipment demand. Data-intensive services, such as voice over internet protocol (VoIP), videoconferencing, and video on demand are anticipated to drive the market growth.
Key Market Driver -
• Increasing demand for fast, secure, and reliable network connectivity to drive the market growth • Cost benefits offered by the ONT equipments would likely to accelerate the market growth
Key Market Restraint -
• High initial investment required for installation, laying cables and deployment of network might hamper the market growth.
Key market players adopt various business growth strategies such as new product launches and product enhancements to sustain their market competence. The ONT industry has also perceived several strategic agreements between vendors to introduce new products and services with added functionalities to sustain new products and services with added functionalities to sustain profitability and revenue share. For instance, in April 2020, Nokia Corporation and Bharti Airtel signed a partnership agreement of USD 1 billion agreement to deploy 5G infrastructure in India.
Prominent companies in the global market include ADVA Optical Networking SE, Verizon Communication Inc., ZTE Corporation, Cisco Systems, Inc, Huawei Technologies Co., Ltd., E.C.I. NETWORKS INC., Fujitsu Limited, ALE International, Tellabs Broadband LLC, Infinera Corporation, and others.
North America is anticipated to hold a significant market share owing to the well-established communication infrastructure. Significant market players are also one of the prime factors that positively impact the ONT market growth across North America. Public and private entities are demonstrating substantial investments and spendings on fiber-optic connectivity. Further, rapidly developing next-generation communication networks such as the 5G network infrastructure have also proven to support market growth. The colocation and cloud network operators in North America have augmented their optical systems purchases, further supporting the region's OTN equipment market growth.
The Asia Pacific is likely to exhibit high market growth due to the nationwide governments' initiatives for communication infrastructure development. Substantial investments by the local entities to develop communication networks will fuel the market growth. For instance, in March 2020, about USD 27.8 billion were invested by China Telecom to develop new 5G infrastructure projects to balance the monetary impact of the COVID-19 outbreak on the telecom market. Also, cumulative deployment of 5G network infrastructure would likely boost the demand for optical fiber connectivity, which positively influences the market growth across the Asia Pacific.
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