Over the last decade there has been a solid recovery in the demand for fibre optic cable. In 2010 global demand for fibre optic cable reached 182 million fibre-km.
Fibre optic cable is of course used in a number of different applications, and these range from the long haul intercontinental/transoceanic cables to metropolitan networks, to access networks and local area networks (“LANs”) in homes or buildings. Each application requires specific fibre optic cable characteristics.
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Fibre optic growth continues
China had been the main driver in the market globally at more than 40% of all world demand. Some in the market had expected the demand for fibre optic cable to slow in China at the end of 2010, but latest data for Q4 2010 shows that demand has continued to remain robust. The demand in China was propelled by network operators’ efforts to improve connectivity and to cater to demand arising from 3G/4G usage. The demand for fibre optic cable in other advanced economies like USA, Japan, Germany, and Netherlands is also rising due to their efforts to build Fibre to-the-Node and Fibre-to-the-Home (FTTH) networks. This combination will likely drive demand globally for fibre optic cable in 2011 to 195 million fibre-km.
Integer Research believes market growth through 2012 will come from Western Europe and North America.
Strong demand globally is breaking away from the business cycle in the USA and Western Europe – since demand is now being driven by FTTH/FTTC. Consumer products such as the Apple iphone, ipad, ipad 2, and range of alternative Smartphones and Tablets, from HTC and Samsung, combined with AirPlay devices such as Apple TV are driving demand for streaming content and Podcasts in 720p and 1080i High Definition. These devices are further exposing existing bottlenecks in telecom operators Wireless and 3G/4G networks, and driving further investment in fibre optic cable. In addition, consumers and business are now demanding FTTH/FTTC in Western Europe and North America. The key issue now appears to be that consumers are willing to pay higher sums for fibre optic access, replacing their DSL lines.
In the USA, Corning has been surprised by the strength in demand from Verizon, and has reported that it is now reaching production levels last seen in 2002. Indeed, Corning reported that it was at capacity at its operations in the USA. We can even see that some of the analysts that were tracking CommScope were also citing this growth potential as one reason why The Carlyle Group took over the company in Q1 2011. There is also additional demand in emerging markets, and new optical fibre lines are being planned in Russia, Brazil, Bangladesh and Uzbekistan, and there are significant expansions in India. This also means that companies such as Draka, Prysmian, Furukawa, SEI and Fujikura, and YOFC in China will all report strong results in their fibre optic cable operations in H1 2011, and may see a significant increase in their margins in this business through the rest of the year.
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The above information was taken from the latest issue of Integer’s Wire & Cable Global Tracker, which shows import, export and production data for all product groups in every country in the world, by volume and value.
It is the only service to give you accurate and unique coverage of the world’s official wire and cable statistics. For more information go to: www.integer-research.com/wire-cable/products/wire-cable-global-tracker