Quantum Communication Market

Market Definition

The market encompasses technologies and solutions that enable secure data transmission based on quantum mechanics principles, including quantum key distribution, quantum teleportation, and entanglement-based communication.

It spans hardware, software, and services for applications in cybersecurity, defense, banking, and government sectors, providing ultra-secure communication resistant to eavesdropping and hacking threats.

Quantum Communication Market Overview

The global quantum communication market size was valued at USD 857.2 million in 2023 and is projected to grow from USD 1,108.4 million in 2024 to USD 7,162.1 million by 2031, exhibiting a CAGR of 30.55% during the forecast period.

Market growth driven by increasing demand for ultra-secure data transmission across industries such as banking, defense, healthcare, and government. Advancements in quantum key distribution (QKD) technology, rising investments in quantum networks, and expanding research initiatives are further boosting this expansion.

Collaborations among tech giants, startups, and academic institutions are fostering innovation in quantum cryptography and network infrastructure. Government support, regulatory frameworks, and substantial funding for national quantum initiatives are further propelling growth, creating a robust sevelopment ecosystem.

Major companies operating in the quantum communication industry are International Business Machines Corporation, ID Quantique, QuintessenceLabs, Quantum Communications Hub, Quantum Business Network UG, QuantumCTek Co., Ltd., TOSHIBA CORPORATION, MagiQ Technologies, Inc., QuNu Labs Private Limited, KEEQuant GmbH, LuxQuanta, QEYnet Inc., SpeQtral Pte Ltd, Quantum Xchange, and Qunnect Inc.

The integration of quantum communication with emerging technologies such as artificial intelligence, blockchain, and cloud computing is enhancing its adoption, enabling next-generation cybersecurity solutions. Additionally, the commercialization of satellite-based quantum communication and the deployment of fiber-optic quantum networks are creating new opportunities.

• In October 2024, STL introduced its MultiCore Fibre portfolio at IMC 2024, showcasing 7-core and 4-core fibre technology designed to enhance quantum communications and silicon photonics. This Make-in-India innovation improves transmission capacity and supports high-efficiency quantum networks by enabling multiple spatial channels for quantum signal transmission.

Key Highlights:

1. The quantum communication industry size was valued at USD 857.2 million in 2023.
2. The market is projected to grow at a CAGR of 3.55% from 2024 to 2031.
3. North America held a market share of 33.75% in 2023, with a valuation of USD 289.3 million.
4. The solutions segment garnered USD 506.2 million in revenue in 2023.
5. The fiber-based QKD segment is expected to reach USD 3,923.4 million by 2031.
6. The large enterprises segment is projected to generate a revenue of USD 4,800.8 million by 2031.
7. The government & defense segment is expected to reach USD 1,604.3 million by 2031.
8. Asia Pacific is anticipated to grow at a CAGR of 31.60% through the forecast period.

Market Driver

"Growing Demand for Secure Communication and Quantum-Safe Technologies"

The quantum communication market is expanding rapidly due to the increasing demand for secure communication and the emerging threats from quantum computing. A key factor boosting industry growth is the growing cybersecurity risks and the urgent need for quantum-safe encryption.

As quantum computers progress, threaten traditional encryption methods  are at risk of being compromised, exposing sensitive data to future decryption-a concern known as the "harvest now, decrypt later" threat.

To mitigate this risk, organizations and governments are adopting Quantum Key Distribution (QKD) and Post-Quantum Cryptography (PQC) to ensure long-term data security. QKD provides a secure key exchange mechanism based on quantum mechanics, while PQC focuses on developing cryptographic algorithms resistant to quantum attacks.

• In January 2025, Thales Alenia Space and Hispasat unveiled the QKD-GEO, the world’s first quantum key distribution (QKD) system from geostationary orbit. The project, funded by the European Union recovery funds through PERTE Aeroespacial, aims to enhance secure communications using quantum encryption resistant to even the most advanced quantum computers.

Furthermore, the widespread adoption of quantum communication technologies across critical sectors such as defense, finance, and telecommunications is aiding market expansion. Governments are accelerating the deployment of quantum-safe networks to safeguard national security, financial transactions, and confidential communications.

The financial sector is prioritizing quantum encryption to prevent cyber fraud, while telecom providers are integrating quantum-safe encryption into their infrastructure to enhance data security for businesses and consumers. These strategic investments reflect a strong institutional commitment to securing digital communication, stimulating market growth.

Market Challenge

"High Implementation Costs and Infrastructure Complexity"

A key challenge influencing the quantum communication market is the high cost and complexity of deploying quantum-secure networks. Unlike classical encryption methods that rely on software-based cryptographic algorithms, quantum key distribution (QKD) requires specialized hardware such as single-photon detectors, entangled photon sources, and highly secure optical fiber channels.

These components are expensive and demand precise environmental conditions. Additionally, maintaining a quantum communication network involves stringent error correction mechanisms and ultra-low-loss optical fibers, further increasing operational costs.

Another significant hurdle is integration with existing communication infrastructure, which was not designed for quantum signals and requires significant modifications or new infrastructure. This makes large-scale implementation challenging, particularly for resource-constrained industries.

To overcome these challenges, the industry is focusing on hybrid quantum-classical networks, integrating quantum encryption into existing telecom infrastructure rather than replacing it. Research in quantum repeaters and satellite-based QKD is enhancing long-distance quantum communication and reducing dependence on costly fiber-optic expansions.

Market Trend

"Advancements in Quantum Communication Infrastructure and Technology"

A major trend influencing the quantum comminucation market is the expansion of satellite-based quantum communication networks, which addresses the distance limitations of fiber-based QKD.  

Unlike terrestrial fiber-optic networks, which experience signal degradation over long distances, satellite-based QKD enables secure key exchange over intercontinental distances, supporting global quantum-secure communication for governments, enterprises, and financial institutions.

• In September 2024, Boeing announced the scheduled 2026 launch of its Q4S satellite, intended to demonstrate quantum entanglement swapping in space. This internally funded mission aims to advance quantum networking for commercial, civil, and military sectors. Boeing's Disruptive Computing, Networks & Sensors division is leading the effort, with HRL Laboratories as the technology partner.

Another significant trend is the development of large-scale quantum networks using advanced quantum repeaters, which enhance the scalability of terrestrial quantum communication. Traditional fiber-based QKD networks suffer from high signal loss, restricting range to a few hundred kilometers.

Quantum repeaters address this limitation by using quantum entanglement to extend communication distances without compromising security. This breakthrough is crucial for connecting cities and countries through secure quantum networks, reducing reliance on satellites, and facilitating the integration of quantum communication in financial, government, and data center operations.

Quantum Communication Market Report Snapshot

Segmentation	Details
By Component	Solutions (Quantum Detectors, Quantum Modulators and Transceivers, Quantum Repeaters, Quantum Key Distribution (QKD) Solutions, Quantum Random Number Generator (QRNG), Quantum-Safe Cryptographic Solutions), Services
By Transmission	Fiber-Based QKD, Free-Space/Satellite-Based QKD
By Organization	Large Enterprises, Small & Medium Enterprises
By Vertical	Government & Defense, BFSI, Healthcare, Aerospace & Defense, IT & Telecommunications, Energy & Utilities, Others
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, UAE, Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation

• By Component (Solutions and Services): The solutions segment earned USD 506.2 million in 2023 due to the increasing demand for quantum key distribution (QKD) hardware and post-quantum cryptography (PQC) solutions to enhance cybersecurity.
• By Transmission (Fiber-based QKD and Free-Space/Satellite-Based QKD): The fiber-based QKD segment held a share of 55.21% in 2023, largely attributed to its early commercialization, well-established optical fiber infrastructure, and strong adoption in secure enterprise and government communications.
• By Organization (Large Enterprises and Small & Medium Enterprises): The large enterprises segment is projected to reach USD 4,800.8 million by 2031, propelled by rising investments in quantum-safe encryption technologies to protect critical business and financial data.
• By Vertical (Government & Defense, BFSI, Healthcare, Aerospace & Defense, IT & Telecommunications, Energy & Utilities, and Others): The government & defense segment is projected to reach USD 1,604.3 million by 2031, fueled by increasing government-backed initiatives and funding for quantum-secure communication networks to safeguard national security and sensitive data.

Quantum Communication Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America quantum communication market accounted for a substantial share of 33.75% in 2023, valued at USD 289.3 million. This dominane is reinforced by strong government funding, early adoption of quantum technologies, and a well-established cybersecurity infrastructure.

The U.S. leads the region with significant investments from federal agencies such as the National Institute of Standards and Technology (NIST) and the Department of Defense, which fund research in Quantum Key Distribution (QKD) and post-quantum cryptography (PQC).

Additionally, leading technology firms are investing heavily in quantum communication solutions, accelerating the commercialization of quantum-safe encryption technologies. The presence of major defense and financial institutions has further increased demand for secure communication networks.

Asia Pacific quantum communication industry is expected to register the fastest CAGR of 31.60% over the forecast period. This rapid expansion is fueled by substantial investments from governments such as China, Japan, and South Korea, all aiming tolead in this technology.

China has led with initiatives such as the Micius satellite and the world’s longest quantum-secured fiber-optic network, advancing secure communication. The regional market further benefits from strong collaboration among academia, government, and private sectors, leading to innovative research and large-scale infrastructure deployment.

Increasing cybersecurity concerns, coupled with rising adoption in telecommunications and finance, are further supporting this rapid expansion.

• In November 2024, DRDO Industry Academia–Centre of Excellence (DIA-CoE) at IIT Delhi demonstrated quantum key distribution (QKD) over a 50 km fiber link and conducted an 8 km optical fiber field test. Additionally, free-space QKD using the BBM-92 protocol was demonstrated over 80 meters in open space, marking significant progress in India’s secure quantum communication infrastructure.

 Regulatory Frameworks

• In the United States, the National Institute of Standards and Technology (NIST) leads post-quantum cryptography standardization efforts to ensure secure communication in the quantum era. Additionally, the National Quantum Initiative Act (NQI Act) provides a regulatory framework for quantum research, including quantum communication.
• In the European Union, the European Telecommunications Standards Institute (ETSI) is developing quantum-safe cryptographic standards, while the European Quantum Communication Infrastructure (EuroQCI) initiative aims to establish a secure pan-European quantum communication network.
• In China, the government has integrated quantum communication into its national cybersecurity strategy, with strong support from the Ministry of Industry and Information Technology (MIIT). Initiatives such as the Quantum Science Satellite (Micius) project enhance space-based quantum communication.
• In Japan, the National Institute of Information and Communications Technology (NICT) leads research  in quantum communication, focusing on quantum key distribution (QKD) and secure network infrastructure.
• In India, the government has launched the National Quantum Mission (NQM) to develop quantum communication and cryptographic standards, supported by the Department of Science and Technology (DST) and other national research bodies.

Competitive Landscape

Key players operating in the quantum communication industry are focusing on innovation in quantum key distribution (QKD), quantum networking, and encryption protocols to strengthen their competitive edge.

They are forming strategic partnerships with research institutions and government agencies to accelerate the commercialization of quantum communication solutions. Companies are actively developing large-scale quantum networks to establish global quantum-secured communication channels.

Mergers and acquisitions are further influencing the market, with firms acquiring startups and niche players specializing in quantum cryptography and hardware development to enhance their technological capabilities.

Additionally, companies are integrating quantum communication with emerging technologies such as artificial intelligence, blockchain, and cloud computing, enhancing the security and efficiency of digital infrastructures and positioning quantum communication as a crucial component of cybersecurity solutions.

• In January 2025, Capgemini and Instituto de Telecomunicações (IT) announced a collaboration in Portugal to develop quantum cryptography solutions for secure digital communication. By combining IT’s QuLabs and Capgemini’s Quantum Lab, the partnership aims to create quantum-safe encryption methods to address emerging cyber threats.

List of Key Companies in Quantum Communication Market

• International Business Machines Corporation
• ID Quantique
• QuintessenceLabs
• Quantum Communications Hub
• Quantum Business Network UG
• QuantumCTek Co., Ltd.
• TOSHIBA CORPORATION
• MagiQ Technologies, Inc.
• QuNu Labs Private Limited
• KEEQuant GmbH
• LuxQuanta
• QEYnet Inc.
• SpeQtral Pte Ltd
• Quantum Xchange
• Qunnect Inc.

Recent Developments (Acquisition/Partnerships /New Technology Launch)

• In March 2025, Nokia and Honeywell Aerospace Technologies partnered with Numana to advance Quantum-Safe Networks (QSN) in Montreal, Canada, and globally. The collaboration aims to foster innovation, enhance cybersecurity, and accelerate the adoption of quantum-secure communication technologies for enterprises and service providers.
• In March 2025, Toshiba and Numana formed a strategic partnership to enhance the Kirq Quantum Communication Testbed in Quebec, expanding its capacity and integrating quantum key distribution (QKD) technology to advance secure communications and position Quebec as a global leader in quantum infrastructure.
• In March 2025, Toshiba Europe Limited integrated Post-Quantum Cryptography (PQC) into its quantum key distribution (QKD) systems, enhancing its quantum-safe networking platform. This combination leverages QKD’s hardware-based security and PQC’s software-based scalability, providing a defense-in-depth strategy against future quantum-based cyber threats.
• In February 2025, IonQ acquired a controlling stake in Geneva-based ID Quantique, a leader in quantum-safe networking and sensing. This acquisition expands IonQ’s quantum networking patent portfolio to nearly 900 and includes a strategic partnership with SK Telecom to advance quantum technologies and secure communications globally.