Broadband Demand Spurs Fiber Growth
ANAHEIM, Calif., March 7, 2006 -- Robust demand for broadband Internet connections, including fiber to the home (FTTH), was behind growth in the fiber market in 2005, said Eric S. Musser, vice president and general manager of Corning Optical Fiber, at Corning's 25th annual optical fiber briefing today at OFC/NFOEC. FTTH will continue to be growth opportunity, he said, especially in North America.
Musser said the total 2005 worldwide fiber market grew approximately 15 percent to 68 million kms, versus last year's market of about 58 million fiber kms. North America and China were the two largest fiber markets and represented more than 50 percent of the world's demand, he said.
The North American market grew approximately 30 percent year-over-year, driven primarily by the full-year impact of Verizon's FiOS project, as well as additional deep-fiber deployments by other regional bell operating companies. Another factor was the rural local exchange carriers' continued steady build out of FTTH, primarily to add video capability to their communications networks.
"We believe municipal FTTH deployments about doubled," Musser said.
China represented about 20 percent of worldwide demand and experienced 10 percent growth versus 2004, which was driven by network investment at China Mobile. Musser added that China has become one of the most price-challenged markets worldwide, due to excess optical fiber manufacturing capacity and a centrally controlled tender process.
Western Europe, representing 15 percent of the worldwide demand, increased by approximately 10 percent, driven primarily by increased activity from the PTTs, who are upgrading their networks to keep pace with broadband demand. In Europe, FTTH is largely concentrated in scandanavia, especially in Amsterdam, Musser said. "In parts of Europe, broadband is considered as basic a public service as a public utility," he added.
Japan, representing 15 percent of the worldwide demand, increased 15 percent following a 40 percent decrease in 2004. Musser said this was the result of stronger demand from NTT for their FTTH network build and competitive FTTH network activity from power utility companies.
"Other Asia," which represented 10 percent of the worldwide demand, experienced moderate year-over-year growth, primarily due to broadband deployments in South Korea and backbone and metro builds in India and Pakistan. The "rest of world" category, which comprised 5 percent of worldwide demand, was flat in 2005 versus 2004.
Musser also analyzed estimated 2005 optical fiber demand and growth rates by application. He said that in 2005, metro and access represented 85 percent of global fiber demand.
"Following growth of 20 percent in 2004, the access segment increased about 25 percent in 2005, greater than any other segment," Musser added. "Access now represents a full 50 percent of total worldwide demand, and we believe it will continue to be the principle growth segment."
Musser said metro demand grew approximately 10 percent. He added that the metro fiber segment in North America, Western Europe and China continued to grow as broadband subscribers increased and drove the need for more bandwidth.
The long-haul terrestrial/submarine accounted for 10 percent of the total worldwide demand, and the segment was flat. Musser said there were some limited extensions of existing long-haul networks in North America and Western Europe, but that long-haul demand continues to come from emerging markets such as Latin America, Russia and the Middle East. He added that the submarine segment saw solid growth in 2005, although off a very small base, as most fiber inventories were consumed in 2004.
The premises market, accounting for 5 percent of the total worldwide demand, grew by about 5 percent.
"Our ultralow-loss fiber is a good match for current growth in this market," Musser said. Corning is launching Vascade EX1000 fiber, a new ultralow-loss optical fiber for the submarine market that will enable longer reach and lower network costs.
Corning's telecommunications segment achieved most of its objectives in 2005, Musser said, including continued improvements in financial performance.
"The telecommunications segment was profitable, it was a top cash contributor for Corning in 2005, and sales increased year-over-year, driven by growth in each of our businesses: optical fiber, cable and hardware and equipment," Musser said.
Corning will continue to focus on financial performance and will pursue FTTx opportunities through innovation, Musser added.
"Corning is unique in that we are positioned to optimize cost and performance across all three core elements of the passive plant with fiber, cable and hardware and equipment," he said. Corning brought more than 20 new fiber, cable, hardware and equipment products to market in 2005, he said, and delivered on its promise to develop a new bend-optimized optical fiber for the access segment.
"This new fiber is one of the key enablers for products Corning is launching for FTTx applications," Musser said. "The company also developed a new coating for its optical fiber that is more bend-tolerant, another critical feature in today's networks and in new cable designs."
Musser said Corning has made a significant enhancement to LEAF optical fiber by further improving its polarization mode dispersion (PMD). This improvement will enable networks to achieve ultra-high data rates, he said.
"Corning started the optical fiber industry 35 years ago with the invention of the first low-loss optical fiber for optical communications, and today we are launching a fiber with attenuation 100 times lower than that initial fiber," he said.
For more information, visit: www.corning.com
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