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Broadband and fibre trends for 2023

Ever-increasing internet penetration remains the biggest driver for the fibre optic market. The outlook for fibre broadband in 2023 remains very good indeed. A recent Reportlinker study puts the global FTTx market at US$24 bn by 2027. IMARC Group expects the global fibre market to reach US$ 26.3 bn by 2028. According to Future Market Insights, global FTTH revenue should even hit US$ 53 bn by 2029.

The market will continue to be driven by a rising need for high-speed internet services, partly to support home working, soaring high-bandwidth (cloud) services and streaming video, and rising demand for backhaul network scalability to accommodate everything from 5G to edge data centres.

Demand remains solid, especially with an unprecedented level of government funding available for closing the digital divide, as well as increasing AltNet activity and national broadband plans. Fibre broadband continues to attract significant investment capital, according to global strategy and management consulting firm Kearney. Companies in this market continue to see valuations of 16x to 20x EBITDA. Kearney predicts that FWA and satellite will become increasingly ‘niche’ as wireline connections become more widespread. Mobile and broadband subscriptions will continue to rise in 2023, while fixed-line connections will continue their decline, claims the Economist Intelligence Unit. According to Julie Kunstler, Chief Analyst, Broadband Access at Omdia, PON will continue to be the most-deployed fibre-access technology worldwide in 2023.

One especially important consideration: where FTTH used to be the main driver for fibre rollouts, this is no longer the case… Today, fibre is required to enable a wider range of services, technologies and applications than ever: for example, Smart Cities, 4K and 8K video, AR and VR, and cloud computing. The smart home application segment is expected to be an especially profitable market for FTTH. Healthcare offers vast opportunities for IoT technology. The global market for IoT-enabled health devices is set to hit $267 bn by 2023, according to Prescient Strategic Intelligence.

As 5G and fibre networks continue to merge, convergence will remain a key trend. There can be no 5G without adequate fibre fronthaul and backhaul – after all, without adequate fibre backhaul and fronthaul (Access networks), 5G won’t ever work as intended.

Wireline broadband already supports approximately 90% of all Internet traffic and the outlook in this area remains good. Some 4% of telco IT (OSS and BSS) workloads are currently hosted on the public cloud and Telecom Cloud Evolution Survey respondents expect this to rise to 23% in five years.

In 2023, it’s likely that more operators will adopt a public cloud solution and migrate workloads there, instead of running their own data centre, which will further drive demand for fibre. Looking at possible challenges in 2023, we can say that supply chains and rollouts are being affected by shortages of raw materials, fibre cable production capacity and labour.

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