Development of Optical Fiber and Cable in China's Wire and Cable Industry

The construction of optical fiber and cable is a fixed asset construction for operators. Once the investment is in place, it is difficult to change, and the service life of the optical fiber is about 20 years. This requires that the optical fiber currently deployed by the operator must meet the data bearing needs in 2030. The current increase in data demand presents an explosive growth in nuclear cracks. Hossin Moiin, head of global technology and innovation at NSN, said that by 2020, mobile broadband network traffic will increase by a factor of 1,000. By then, mobile networks must meet 1GB per person per day.
Affected by the national broadband China strategy and the promotion of the 4G LTE construction, China's optical fiber and cable industry is currently at the peak of the industry, but the growth rate of the industry is gradually slowing, especially in terms of demand growth.
The construction of optical fiber and cable is a fixed asset construction for operators. Once the investment is in place, it is difficult to change, and the service life of the optical fiber is about 20 years. This requires that the optical fiber currently deployed by the operator must meet the data bearing needs in 2030. The current increase in data demand presents an explosive growth in nuclear cracks. Hossin Moiin, head of global technology and innovation at NSN, said that by 2020, mobile broadband network traffic will increase by a factor of 1,000. By then, mobile networks must meet 1GB per person per day. The demand for data to meet the requirements of the current broadband technology after 10 years or even 20 years is indeed extremely difficult.
But operators will never give up long-term plans because they are hard-pressed. Because the material supplier only needs to deliver the optical fiber to the operator, the input risk will be transmitted, and the long-term future risk will be borne by the operator. Based on this, operators must have strong forward-looking low-loss, ultra-low-loss optical fibers when they are building a network. At present, manufacturers that can produce ultra-low-loss optical fiber in the world, except for Corning's other companies, cannot.
This will lead to a polarization of the situation. On the one hand, ordinary optical fiber has excess capacity, oversupply, and prices will drop sharply; on the other hand, low-loss, ultra-low-loss fiber will form a monopoly of technology, supply will be limited, and prices and demand will increase.
However, many manufacturers have placed their hopes on the implementation of the Broadband China strategy and the advancement of the 4G construction, thereby stimulating the demand for optical fiber and cable. Therefore, major domestic manufacturers such as Hengtong Optoelectronics, Zhongtian Technology, and Fiberhome Communications have significant expansion operations in 2012, and some manufacturers will continue to expand production in 2013. It is estimated that in 2013, the industry's production capacity will exceed 170 million core kilometers, which will greatly exceed the industry demand of 20 million core kilometers. It should be noted that after the peak demand, how will the company respond to the dilemma caused by the declining demand?
From the growth of demand for optical fiber and cable from the three major operators from 2006 to 2012, it can also be seen that the release of 3G licenses from 2008 to 2009 has a significant effect on the optical fiber and cable market. In 2008, the growth rates of mobile, China Unicom, and telecommunications were 99%, respectively. 113% and 79% respectively, in 2009 they were 50%, 64% and 103% respectively. However, as demand peaked, the rapid decline in demand was encountered. At present, China’s optical fiber cable production has reached a relatively high level. Therefore, 4G is coming. It is necessary to see opportunities as well as the risks behind the opportunities.
Domestic fiber optic cable manufacturers should be alert to the overcapacity situation. Expanding profits should not be the only way to expand production capacity. Instead, technology development should be the guide, and cooperation with technologically advanced companies should be used as a channel to continuously develop market supply and demand. Large-scale, high-demand products, so as to form a technical monopoly, improve product barriers to entry, can greatly increase the competitiveness of enterprises.

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