Page 36 - Market Analysis Report of Optical Communications Field in China & Global market 2016

Currently, many vendors in North America such
as AT&T, CenturyLink and Google, get involved
in providing Gigabit services. It is estimated
that among the 1000+ FTTH service providers
in North America, more than half will provide
Gigabit services in five years. China Unicom and
China Telecom also launched certain pilot test
for “Gigabit broadband to home”.
2.CAGR of the Global Submarine Market will
reach 5.75%
Currently, the constructions of submarine cable
between countries are being carried out in full
swing: the Brazil-Uruguay submarine cable
system is to be completed by the end of 2017；
Huawei undertakes to construct the Latin
American submarine cable system；TE Subcom
in the US and Hawaiki in New Zealand also
launched a new submarine cable deployment.
Under the strong driving demand of Internet
protocol traffic and bandwidth, it is estimated
that by 2018, the global submarine cable will be
laid up to 2 million km. The CAGR of global
submarine cable market will reach 5.75% in
2016-2020.
Chinese Market
From the perspective of demand, in 2015,
China’s demand for optical fiber and cable
exceeded 200 million fiber km, accounting for
55% of the total demand in the world. One of
the reasons why China had such a large demand
last is that China Mobile purchased a stunning
amount of optical fiber and cable. It is reported in the first half of 2016. In the second half, it
that in 2015, China Mobile purchased 94.52
million fiber km of G.652 fiber, 88.475 million
fiber km ordinary cable, 65.91 million fiber km
non-skeletal ribbon optical cable, and 314.81
million fiber km ribbon-shaped optical cable.
1.Operators’ demand to trigger a new round of
production expansion
Since the beginning of 2015 when China
Telecom and China Unicom obtained the
FDD license, the two operators have greatly
accelerated the pace of 4G network construction
and built approximately 500,000 and 400,000
4G base stations respectively. Meanwhile,
China Telecom and China Unicom also
China Optical Fiber and Cable Market Share
36
vigorously promote the optical transformation
of access network and built several “all-optical
province” in the country. In 2015, China
Mobile purchased 94.52million km fiber and
98.21million fiber km optical cables, which is
quite an alarming demand. It has successfully
built the world’s largest 4G network with 4G
base stations up to 1.1 million.
As the first year during China’s 13th Five-Year
Plan period, the optical communications market
in 2016, especially the demand for optical
fiber and cable continued last year’s strong
momentum. With multiply favorable policies such
as “Internet+”, “Broadband China” and “New
Smart City”, a lot of advanced technologies and
research achievements will be applied in fields
like information infrastructure construction, cyber
security protection as well urban information
management; such policies will also promote the
transformation and comprehensive upgrading of
China’s optical communications industry so as to
stimulate a new round of rapid development. In
2016, China’s three operators continue to increase
their investment in fiber network construction and
promote the strategy of “speed improving and
tariff cut-down”. Ultra-fast broadband and “4G
+” become the operators’ major investment focus,
which will give birth to large demand for optical
fiber and cable. As a result, the global demand for
optical fiber and cable will continue to grow.
China Mobile launched a centralized purchase
of 14.81 million fiber km special optical cable
once again started the centralized purchase
with an estimated procurement size of around
215,665 km (equivalent to 61143468 fiber km).
The procurement scale is still the world’s first.
Purchasing large-scale optical fiber and cable
for two consecutive years is relatively rare,
from which we can see that China Mobile’s
crave for optical fiber and cable for its 4G-LTE
and fixed broadband construction. It is thereof
estimated that China Mobile’s demand for
optical fiber and cable will exceed 120 million
fiber km from 2016-2017.
The estimated huge demand of China Mobile
for fiber definitely inspires the whole optical
communications industry.
Meanwhile, infected by this,
China Telecom and China
Unicom will also increase
their investment in the fixed
network, which will gave
birth to more demand. At
present, it’s generally tight
for domestic optical fiber and
cable manufacturers to deliver
products, which will make the
fiber price rise in the short term. communications industry is rapidly moving
Under such circumstance, the
domestic optical fiber and cable
manufacturers have already set
off a new wave of production
expansion.
Next 1-2 years is still a golden opportunity for
China’s optical communications industry. It
is estimated that in 2016, China’s demand for
optical fiber will reach 220 million to 248 million
fiber km. In the next decade, China’s demand for
optical fiber and cable will remain high.
Business performance of mainstream optical
fiber and cable manufacturers in China
Early before 2015, the Chinese optical fiber
manufacturers have already nominated the
Chinese market and owned quite a large share in
the overseas market. In 2015, both the demand
and output of optical fiber and cable in China
occupied more than half of the global level.
China’s domestic demand for optical fiber and
cable exceeded 200 million, which accounted
for 55% of the global demand. In the first half
of 2015, some Chinese optical fiber and cable
manufacturers like YOFC, HTGD, Fiberhome
made breakthrough in the field of low-loss and
large-effective-area fiber and released products
applicable to 100G/400G backbone networks
so as to snatch the high-end backbone optical
network market.
The structure and competitive situation of
domestic optical fiber and cable industry are
relatively stable. In the China Mobile and China
Telecom’s centralized purchase, enterprises like
YOFC, HTGD, Fiberhome, Futong, ZTT and
Tongding obtained a major share. The production
capacity of those enterprises almost account for
nearly 80% of China’s overall capacity.
New and high-end products
Currently, driven by “Broadband China”,
“Internet +” and the new requirement of
“speed improving and tariff cut-down”, the
development of new business like IPTV and big
data undoubtedly raised a higher requirement
for the existing network, which means not
only the performance of the equipment need to
be improved, but also a new kind of low-loss
optical fiber more suitable for large-capacity,
long-distance transmission need to be developed.
Ultra-fast broadband era is on the way. Thus,
the new high-end products like the ultra-low-
loss single-mode optical fiber and ultra-low-
loss optical fiber that meet the requirement for
400G and 400G+ communications are now quite
popular in the market.
In fact, early in 2015, some major enterprises
in the Chinese optical communications industry
have released a series of high-end products. For
example, YOFC and HTGD released a series
of ultra-low-loss and large-effective-area fiber.
We believe that under the guide of these leading
enterprises, other manufacturers will also
start to upgrade their products in succession,
which also indicates that the Chinese optical
toward the “three highs” level (high-end brand,
high-end market, and high-end technology).
Meanwhile, the key enterprises in China’s