Optical Communication Market- Growing Need For Faster And Reliable Communication Networks, Increase In Number Of Data Centers


Optical communication or optical telecommunication is a process of sending information at a distance using light as a carrier. The optical communication system consists of a transmitter or a modulator, a channel and a receiver or a photo-detector. A transmitter encodes the analog information or signal into an optical signal; a channel carries the encoded signal from transmitter to destination, and a receiver reproduces the information from the encoded optical signal. The most commonly used channel for optical communication are optical fibers which carries the optical information to the destination. The light source requirement varies depending on the application such as long haul communication or local area network systems. Usually, Light Emitting Diodes (LED’s) are used for low data rate and short distance applications due to their low power and bandwidth capabilities. On the other hand, Laser Diodes are preferred for high data rate and longer distance transmission applications due to their high power and high speed capabilities. A receiver or photo detector converts the light signal into an electrical signal using photoelectric effect. Most commonly used photo detectors are avalanche photo diode and PN photo diode which are made of germanium, silicon and InGaAs and its material composition varies as per the application’s wavelength requirements. Some of the advantages of optical communication over copper wire based communication are long distance signal transmission, transmission security, low attenuation, high bandwidth, smaller diameter, and light weight structure.

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Growing need for faster and reliable communication networks, increase in number of data centers and rising adoption of cloud-based services are some of the factors responsible for the growth of the global optical communication market. Optical communication systems help to achieve extremely high bandwidth by transmitting data via light as optic signals. The introduction and growing adoption of new applications and technologies such as wearable devices, cloud computing, and Internet of Things (IoT) to address changing consumer demands is expected to boost the optical communication market. Furthermore, growing use of optical transceivers to upgrade existing telecommunication networks and launch of large mega data centers are likely to further push market revenues in the coming years. With the growing use of internet for smartphones and mainstream adoption of cloud computing technologies, the data center application segment is expected to witness significant market share over the forecast period.  Although risks associated with optical network security because of fiber hacks is anticipated to be the restraining factor for market growth, growing broadband connectivity in developing countries and advancements in VoIP, LTE, and 5G network technologies presents huge market growth opportunities.

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