Telecom market stakeholders will invest over $6 billion in quantum key distribution (QKD) development and implementation between 2025 and 2030, Juniper Research report said.
QKD leverages quantum mechanics to create encryption keys that cannot be intercepted, enhancing network security against potential quantum computing-based attacks. This investment is driven by concerns that traditional encryption methods will become vulnerable to quantum threats, particularly for enterprise users.
The scalability of QKD solutions remains a challenge, as telecom operators must deploy quantum-capable hardware, such as quantum random number generators, across extensive networks. QKD hardware is expected to be the largest cost factor in these deployments.
As QKD networks expand, operators will need advanced tools for real-time quantum cryptography management, including AI-driven network management platforms for optimized traffic routing and resource allocation, as well as quantum network simulators. According to research author Michelle Joynson, telecom operators must invest in QKD now to protect against future quantum threats and monetize their enterprise network services.
Who’s investing?
BT and Toshiba launched the first commercial test QKD network in London.
Orange spearheaded the ParisRegionQCI project, establishing a QKD network in Paris with the support of a consortium of companies, startups, and researchers. This network will be retained and expanded beyond Paris.
SK Telecom introduced a hybrid QKD and post-quantum cryptography (PQC) solution that combines QKD-generated keys with PQC encryption. The PQC component of this solution was certified by the National Institute of Standards and Technology (NIST) in August 2024, making it an advanced security option.
Challenges
QKD technology faces significant interoperability challenges due to its reliance on complex hardware that must integrate into existing telecom networks. Current QKD key rate speeds are insufficient for modern communication demands, and different QKD devices often use varying protocols and wavelengths, making integration difficult. Additionally, distance limitations caused by qubit decoherence further restrict interoperability.
However, continuous innovation and investment in technologies like optical wavelength multiplexing can help overcome these challenges.
In September 2024, Toshiba demonstrated a high-speed QKD system using multiplexing, combining three QKD systems on the same fiber with optical wavelength multiplexing, server virtualization, and key integration control.
Juniper Research recommends that QKD vendors and service providers collaborate with regulatory bodies such as the European Telecommunications Standards Institute (ETSI) and the International Organisation for Standardisation (ISO) to establish industry-wide standards and certifications, ensuring better interoperability as the market evolves.
To address QKD’s distance limitations, vendors and service providers can explore satellite-based QKD by partnering with satellite network operators (SNOs) and developing ground stations for extended reach. Additionally, collaboration with companies and universities working on quantum repeaters and quantum memory will be crucial for advancing long-distance QKD networks.
With substantial government funding from countries like China, the UK, and much of Europe, alongside R&D investments from major corporations such as Toshiba and BT, technological interoperability is expected to improve. However, QKD vendors and service providers must actively work with network operators and regulatory bodies to standardize and certify QKD systems, ensuring smooth integration with existing infrastructure and accelerating adoption.
The quantum skills deficit poses another challenge, as the rapid advancement of QKD technology demands specialized expertise. As QKD research and testing expand, the lack of skilled professionals may create further interoperability issues and slow adoption. To mitigate this, QKD vendors and service providers can collaborate with universities on cutting-edge projects, particularly those focused on extending QKD networks. Such partnerships will provide access to niche expertise and expensive research equipment necessary for developing and testing new QKD solutions. Additionally, the creation of dedicated QKD academic programs will help build a skilled workforce, ensuring a steady pipeline of qualified professionals.
Ongoing employee training is also essential. QKD vendors and service providers must implement workshops, training courses, and attendance at key quantum security conferences like QCrypt to keep their workforce updated on the latest technological advancements.
Baburajan Kizhakedath
