Photonics Spectra - March 2009

OPTICAL FIBER MARKET

Keeps Plugging Away

Despite Recession

BY DAVID L. SHENKENBERG, FEATURES EDITOR

A2009 by BuddeComm and Chiltern, more than 40 million people world-ccording to the FttH Fact Book

wide currently subscribe to fiber optic networks including FttH, or fiber to the home. Although DSL has more market share of broadband customers around the world, some experts say that optical fibers could overtake it within five to 10 years.

The optical fiber market could reach this level of growth even sooner, but certain obstacles could prevent this. For example, some technologies are extending the life of DSL, which will make telecoms more resistant to switching to optical fibers. At the local level, project managers need to plan the installation of fiber optic network infrastructure without disturbing other underground systems. The populace

may complain about the impact of the construction on community appearance, the environment and public safety. People also might vandalize or steal the equipment.

However, these issues are relatively minor. The three primary factors affecting the optical fiber market are cost, regulation and competition.

A discussion of the market cannot begin without addressing the elephant in the room: the global recession. However, despite the economic downturn, the optical fiber market is moving forward.

Some countries help roll out fibers

In Europe, broadband access has been viewed as a matter of public welfare. This outlook has helped promote the expansion of fiber optic networks. Competition between countries also has spurred growth.

In Sweden, Denmark, Finland and the Netherlands, governments have helped telcos roll out fiber optic networks. In response, France, Italy, Germany, Portugal, Spain and the UK have been rolling out fiber networks as well. However, these countries have favored hybrid fiber-copper networks due to the cost of optical fibers.

In Australia, a 2007 initiative of the Labor Party would have helped optical fiber rollout, but this measure was resisted by Telstra, which controls the largest market share on the continent.

As one might expect, growth is slower in poorer continents such as Africa and South America. However, there are opportunities in relatively wealthy and politically stable countries such as Brazil and Algiers.