CORNING, N.Y., Feb. 4 -- A sustainable recovery in the telecommunications industry will be led by strong demand for new services enabled by systems such as fiber-to-the-premises (FTTP), according to Corning Inc.
Larry Aiello, president and CEO of Corning Cable Systems, and other Corning executives are speaking to more than 300 financial analysts and investors at Corning's annual investors' meeting today in New York.
Any telecom recovery will be led eventually by development in the access segment of the network, Corning said in a statement.
"By recovery, we mean a broad-based market improvement involving sustained construction by many customers in many regions," said Aiello. "Throughout the world, we expect broadband use to continue to grow as increased capability, combined with speed, drive system requirements."
In North America in particular, the access segment network growth is being driven largely by the bundling of telephony, broadband access and video. Corning said optical is the best medium to provide this bundling of services, commonly referred to as "triple play," over a common delivery platform.
Corning said it considers its own telecommunications product innovations to be an important contributor to the company's continued success in this market.
The company said Verizon's FTTP project successfully passed more than one million homes last year and it plans to add an additional two million homes this year. Corning's total revenue opportunity for each home passed is between $130 and $220. Additionally, SBC and Bell South have begun fiber-based network infrastructure projects that may provide $35 to $55 per home in potential revenue opportunities for Corning.
Continued investments in three major business growth opportunities -- FTTP/FTTX (fiber-to-the-home and -business), diesel products and liquid crystals display (LCD) glass -- and a significantly improved balance sheet has Corning "well-positioned for success," said Wendell P. Weeks, president and COO.
Corning's board of directors has approved a $70 million expansion of the recently opened diesel substrate and filter manufacturing facility in Erwin, N.Y. This expansion will be paced to meet growing customer demand for the company's products for medium- and heavy-duty clean diesel applications, the company said.
Peter F. Volanakis, president of Corning Technologies, said the global diesel product market, about $200 million today, will accelerate strongly after 2006, driven by US regulatory requirements, and could reach a $1 billion market in 2008.
Volanakis said the overall market demand for liquid crystal display glass is expected to grow between 40 percent and 60 percent in 2005 and continue to grow at a compound annual rate of 40 percent through 2007, he said.
According to Volkanis, "The majority of the recent growth has been the result of LCD monitors replacing the traditional desktop CRT and steady increases in notebook computers. However, in 2005, LCD TV will continue its momentum, creating a third wave of glass demand for our industry,"
James R. Houghton, chairman and CEO, reiterated his announcement of Jan. 26 that he will turn over the role of CEO to Weeks at the company's annual shareholders' meeting on April 28. Houghton will retain his position as chairman of the board of directors. Volanakis will become COO.
For more information, visit: www.corning.com