The fiber optics market is expected to grow at a CAGR of 5% during the forecast period. Increase in the number of ftth homes and subscribers, drivers.2, and drivers.3 are some of the significant factors fueling fiber optics market growth.
Increase in the number of ftth homes and subscribers
The market in MEA is expected to witness strong growth during the forecast period. The increasing number of Internet users, as well as mobile users, is expected to contribute to the growth of the market in the region. For instance, the number of Internet users in MEA is expected to increase by over 60% between 2019 and 2023. During the same period, the number of mobile users is expected to increase by over 20%. Such growth is expected to boost the telecom infrastructure expansion and will drive the demand for fiber optics in the region. In February 2019, Emirates Telecommunication Group Company PJSC (Etisalat), a telecom operator in the UAE, announced that it would set up 600 5G sites in the country to boost its 5G network and infrastructure.
In addition, the development of smart cities is expected to drive the market growth in MEA. The governments of various countries in MEA are focusing on increasing the security of cities and have undertaken smart city-related projects. For instance, the UAE’s largest city, Dubai, aimed to make 25% of all transportation autonomous by 2030. The transportation strategy was launched in 2016, which focuses on environmental and efficiency improvements and is expected to reduce annual economic costs to $6 billion. In addition, in October 2018, Masdar City launched an autonomous shuttle, which will run on a 1 km-route, and seven more vehicles will be added to the fleet in the coming years. Such developments will propel the growth of the fiber optics market in the region during the forecast period.
Furthermore, the increasing investments for the construction and expansion of data centers are expected to contribute to the growth of the market in the region. For instance, in January 2018, Global Data Center (GDC), a provider of data center facilities, announced its plans to double the size of its facility in Herzliya, Israel. The data center currently spans 2,250 square meters and will be expanded to provide 4,500 square meters of total floor space.
African countries are witnessing a growth in 4G investments, while investments in 5G technology are rising in the Middle East countries. For instance, in November 2019, Airtel acquired Intercellular Nigeria with an investment of $70 million for an additional spectrum in Nigeria to boost its LTE connectivity by purchasing a 10-MHz spectrum block in a 900-MHz band.
In the wake of the COVID-19 pandemic, several countries have imposed lockdowns to prevent the spread of the disease. The lockdown situation has severely impacted various sectors in the region, including telecommunications and data centers. Several ongoing infrastructure and development projects in various end-user sectors have come to a halt temporarily due to the lockdown, which has impacted the operational procedures of various organizations. It is estimated that the lockdowns imposed across different countries have limited the use of fiber optic solutions, which subsequently, is expected to hinder the growth of the market in the region in 2020. However, the increasing adoption of cloud-based storage solutions by telecommunication providers is expected to propel the growth of the market in the region during the forecast period.
