Quantum Communication -- McKinsey Report 25'

Between Hype and Hope

I’ve just finished reading the latest McKinsey report on quantum communication—and, it’s a ride that i was expecting and shared in my 2025 predictions. This field is one of those peculiar beasts that’s both wildly overhyped and quietly undersold. One minute you’re hit with projections that seem straight out of a science fiction novel (think a market size of over $10 billion by 2035), and the next you’re forced to confront the reality that true progress is chugging along at its own, unhurried pace.

I’m calling this piece a “Quantum Communication: Between Hype and Hope” because that’s exactly what it feels like: a puzzle of big numbers, bigger promises, and a reality check we can’t ignore.

Here are a few thoughts that have been rattling around in my head:

• Exaggeration, Amnesia, and the Dunning-Kruger Effect:
  In everyday life, if someone constantly exaggerates, we eventually stop taking them seriously. Yet, when it comes to market reports, we find ourselves oddly willing to overlook glaring gaps in data—perhaps because we collectively suffer from a sort of “amnesia” about the limits of our own knowledge. McKinsey’s figures are impressive on paper, but they’re built on a labyrinth of assumptions and “what-ifs” that remind us how little we really know.

• Truth Is a Practical Necessity:
  Einstein once said, “Everything should be made as simple as possible, but not simpler.” In the high-stakes world of quantum communication, clarity isn’t just nice to have—it’s essential.

• The Culture of Instant Expertise:
  Quantum communication, with all its promise for ultra-secure networks and a quantum global internet, will demand rigorous research, relentless patience, and a healthy dose of humility. It’s not about having the flashiest predictions; it’s about building a foundation that can truly support a breakthrough.

Now, let’s go deeper with what the McKinsey report tells us:

• Quick Market Snapshot from McKinsey

  • Market Size: The quantum communication market stands at about $0.9–$1.0 billion in 2023, potentially rocketing to $10.5–$14.9 billion by 2035. That’s a 23–25% CAGR, which is jaw-dropping—if the technology keeps pace.

  • Key Verticals:

    

    • PQC (Post-Quantum Cryptography) is the most mature.

      • Already being standardized (NIST efforts, among others).

      • Cheaper to deploy and more immediately viable than many quantum hardware solutions.

    • QKD (Quantum Key Distribution), though theoretically unbreakable by the laws of physics, still faces higher infrastructure costs and a narrower adoption path in the short term.

    • Modular interconnects and regional networks might see big leaps around 2027 and 2029 respectively, if breakthroughs happen as forecast.

  • Who’s Buying:

    • Government and defense sectors dominate right now (62–66% share in 2023), but private sectors—telecoms, cybersecurity, financial services—are expected to ramp up quickly. (But how about government’s move on incentives and policy? we still lack of that)

    • North America is projected to take about 32% of the global share, riding on robust funding and a vibrant start-up ecosystem.

    • Meanwhile, Europe is a hotbed for QKD innovation, fueled by NATO prioritization and a strong start-up scene.

    • China is forging ahead in quantum communication, especially in satellite-based QKD, despite global tensions and export controls.

  (My take: With all the recent moves in U.S. policy to curb China’s quantum development—like export controls, talent restrictions, and urging allies to reduce cooperation—the U.S. is leaning on private-sector dynamism, while China’s state-driven approach pushes forward its strengths in quantum communication. The U.S. leads in quantum computing hardware with higher qubit counts and advanced error correction, but China excels in creating robust domestic supply chains. Each model has its advantages and risks.)

Accelerators vs Decelerators

Governments that move fast to standardize quantum protocols or fund big R&D might see a head start. The rest risk missing out or scrambling to adopt solutions from bigger players :)

• Accelerators:

  • Government policies that fast-track standardization or fund large R&D initiatives (e.g., the National Quantum Initiative Act in the U.S.)

  • Strategic alliances (e.g., NATO or EU programs) that pool research, resources, and guidelines.

• Decelerators:

  • A fragmented global approach where each region sets different protocols.

  • Lack of policy incentives or sluggish regulation, preventing interoperability.

The Bigger Picture:

• Let’s step back. This isn’t about just upgrading from classical to quantum networks. We’re talking about unlocking entirely new applications: distributed quantum computing, blind quantum computing (where the machine doesn’t see your data), and quantum sensors that could detect changes at unprecedented levels of precision.

• But the challenges are equally enormous. We need specialized hardware, new protocols, and a fundamental shift in how we handle cryptography—especially with Q-Day looming (the day quantum computers can break classical encryption).

My take:

• We’ve been burned before by hype cycles in AI, blockchain, and a dozen other “miracle” technologies. Quantum is no exception. The potential is massive—nobody doubts that. But the path is rarely linear. If we look at HPC or AI’s trajectory, we see winters, hype, and slow, real progress that eventually changes everything.

  To harness quantum communication effectively, we need:

1. Long-Term Investment: Be prepared to fund multi-year R&D efforts, acknowledging that early experiments may fail.

2. Global Standards: Interoperability depends on unified protocols—without them, we’ll have isolated pockets of quantum networks.

3. Crypto-Agility: Organizations must be ready to pivot from classical to quantum-safe encryption.

4. Cooperation and Security: Multilateral collaborations (like NATO, EU, etc.) must balance open research with national security interests.

At the end of the day, these market figures and technical specifications are more than just numbers—they’re a call to both ambition and caution. They remind us that while quantum communication holds enormous potential, the journey from theory to practical, transformative application is still full of twists, turns, and plenty of room for unexpected surprises.

I’d love to hear your thoughts on this emerging landscape. How do you see quantum communication reshaping industries, and what challenges do you think we need to overcome to fully harness its potential? Let’s start a conversation that’s as thoughtful as it is forward-looking.