Martin Chiesa, BSRIA Senior Consultant
To understand the current state of the POL market and where it is headed, historic data is essential. The global POL market for 2019 was estimated at USD 280 million at the manufacturer’s selling price, considering only passive and active components (and excluding UPS, batteries, remote powering systems, and accessories). However, as we all know – so many things have changed since 2019.
To understand where the market is going, let’s first look at pre-pandemic market figures. In BSRIA’s 2015 POL report BSRIA considered three possible scenarios – niche, slow adoption and fast adoption. Later, in 2017, we added a new scenario as the market evolved above our most optimistic expectations. For 2019 the market was in line with the most optimistic scenario from 2015 but below that of 2017.
Then, due to the COVID-19 pandemic, in 2020 the market contracted.
When analyzing this impact, there was significant variation between countries, typically related to the general economic impact of the pandemic and also to the level of interventionism of the government to support the economy and/or particular sectors, including buildings. There was also variation between vertical markets, with sectors such as travel, hospitality and retail especially badly hit, with health, datacenters and in some cases, education remaining more buoyant.
On average, the first half of 2020 saw the biggest fall, with severe disruption caused by lockdowns. However, in some cases, the worst effects were not felt until the second half of the year.
What’s on the horizon?
Considering POL’s main verticals, it is reasonable to assume that the market will not fully recover until the end of 2022, but it is also expected to expand at a faster rate than conventional Ethernet networks. Further to increasing industry acknowledgment of POL’s are additional players, such as Cisco, entering the market. And, with the assumption that vaccine rollout provides effective immunity, economic and market recovery follows, tourism gradually gets back to normal and POL increases its market penetration in other verticals (i.e., industry, logistics, transport), we expect strong growth in the POL market from 2022-2024.
To support this trajectory, it is vital for POL to diversify, expanding to verticals such as healthcare, senior accommodation, education and industry and to continue expanding in the office market (particularly smart buildings). The transition from GPON to XGS- PON and NG-PON will also drive growth and support future adoption of WiFi 6 and WiFi 7 technologies over POL.
Taking all this information into context, here are the top six takeaways for the POL Market in the post-pandemic world:
- New market players, such as Cisco, entering the market, product development and increased global awareness of POL and its benefits are the key drivers in growth.
- POL market growth is expected to expand at a faster rate than conventional Ethernet networks.
- Top markets for POL adoption include hospitality, office buildings, government and student/senior residences.
- Key trends driving adoption of POL are 10G PON gaining share, strong growth in remote powering, while 4 Port ONTs remain the norm.
- Asia, North America, Middle East and Latin America are the four geographical regions leading the POL global market, with the strongest growth expected in Asia and the Middle East.
It’s important to note that experts and active players in the industry, such as APOLAN, are doing their part to overcome one of the main barriers the technology faces – awareness. During BSRIA’s yearly update on the structured cabling markets we have, once again, witnessed more demand and awareness regarding POL solutions compared to previous years. While the POL market is still in an early stage, we are seeing signs of the rate of adoption gaining pace. POL awareness is increasing and adoption will follow.
Martin Chiesa is a Senior Consultant at BSRIA, a non-profit member-based association founded in the UK in 1955, providing consultancy, testing, instrumentation and research, specialized in building services and the construction industry. BSRIA’s mission is to make buildings better through a vast range of services, including technical advice and investigation, information, testing, construction compliance, instrumentation and market research and consultancy. For more than two decades BSRIA has been following the structured cabling markets for LAN and data centers, and in 2011 the association published its first POL report.