Fibre to the home projects — except in Europe, which is lagging other parts of the world — and wireless broadband are driving demand for makers of optical fibre, writes Hakan Özmen 

 
 

 
Hakan Özmen: Europe is lagging behind other regions
in terms of FTTH deployment 

 
 
It continues to be a tough time for manufacturers in the telecom cable business. With the world slowly emerging from recession there is still a high degree of nervousness amongst the major operators in terms of investment in new infrastructure. That has a direct impact on the many companies in the overall supply chain including those supplying the system hardware, both active and passive.
Fortunately cable makers are used to dealing with turbulent times, with many in the business remembering only too clearly the difficulties of the 2000-02 era when the industry was hit hard following the internet bubble and its subsequent bursting, leading to an overall melt-down and restructuring of the industry.
Things did recover in the following years and demand — particularly for optical cable — has grown steadily since then to levels which are now significantly higher than they were at the 2001 peak.
The industry is now in a period of consolidation and while it has not been immune from the recession it has maintained a degree of confidence that the underlying recovery will continue.
The confidence is based upon a belief that the growth this time has more solid foundations. We are now in a true broadband age where content is real, not virtual, in terms of the huge number of services and applications available. The need for increased bandwidth to the end user is growing at a relentless rate and, in the opinion of many, the provision of an optical fibre link to the end user does appear to be the only future-proof way of delivering genuine broadband to the masses.
Fibre to the home — FTTH, or FTTx in its more generic form — is therefore becoming a common feature within many telecoms environments. Taking a strong lead in deployment are the Asia Pacific countries where a last mile fibre link in the access network has become the norm in Japan and South Korea.
In Japan for instance broadband speeds of 100 megabits a second have already been available to a large percentage of the population for some time.
North America, likewise, has committed itself to a fibre based infrastructure with major national operators, complemented by numerous municipalities and utility companies, providing direct fibre to a growing number of subscribers’ homes.
The situation in Europe is currently very fragmented in terms of FTTH. This is due to a number of factors including uncertainty regarding the regulatory position on unbundling and the basic economics of replacing an extensive copper legacy network.
Subsequently Europe is lagging behind other regions in terms of FTTH deployment and many of the efforts which we are seeing are being made not by the main, incumbent operators but by alternative service providers who do not necessarily have the same constraints to consider. The net effect is that the number of connected households in Europe is expected to grow steadily over the next few years from an estimated five million this year to approximately 23 million by 2014.
However the access network is not the only part of the system that is providing growth for the cable makers. The uptake of wireless technology involves a continuous build programme of towers and base stations — almost all interconnected by fibre.
This explains why countries such as India and especially China are some of the world’s biggest consumers of optical fibre, despite both having extremely low — and in fact diminishing — fixed line density. In 2009 China accounted for about half of all the optical fibre deployed worldwide, most of this to support its rapidly expanding mobile networks.
Power utilities also continue to participate in the telecom sector. They have an excellent ready-made telecoms backbone infrastructure by virtue of their medium and high voltage overhead networks and a variety of technologies are available to deploy optical communications. Similarly specialised cable systems allow the use of other infrastructures such as railways, roads, canals and even sewers to be used as information highways.
The cable industry therefore continues to innovate and develop new products in terms of both optical fibres and cable systems for every application. What is absolutely clear is that the need for extra bandwidth will continue to grow at a rapid rate leading to a corresponding need to build and strengthen the cable infrastructure.
This growing demand likewise has raised the global supply levels of cable resulting in a highly competitive environment for the producers, although overall the industry can look forward to a reasonably healthy future for some time to come. GTB 

 
Hakan Özmen is business telecom director at Prysmian