Page 38 - Market Analysis Report of Optical Communications Field in China & Global market 2018

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Edge Data Center FTTH is probably no longer the main cause of market growth.
Applications such as artificial intelligence, virtual reality, augmented Many developed telecom markets, including the United States and Japan,
reality, vehicle control and smart cities require faster download speeds have experienced the rapid development of FTTH, so that their FTTH
and less delay. This means that mobile and computer applications need construction has been at a very high level, leaving little room for growth.
to have more small localized data centers rather than large data centers in In some developed telecom markets, FTTH projects are in a high-rate
remote areas. The development of these applications results in a trend of coverage, resulting in the shrinking optical cable demand. In developing
"edge computing", meaning that data processing centers need to occur in telecom markets, due to low capital expenditure budgets and small market
telecommunication access networks. scope, FTTH projects are not likely to deploy as fast as before. Therefore,
FTTH projects lose momentum to drive the optical communication market,
The development of the concept of edge computing depends on the and probably is no longer the key factor of market growth. In 2017, the
performance of 5G mobile networks, which in turn depends on optical fibers amount of cable installed in FTTH construction projects was 133 million
to connect base stations and radio heads. This evolution depends on the fiber-kms, accounting for 27% of the total market for single mode cables,
proliferation of new compact data centers located in central offices or local down 31% from 2016.
switches or even base station locations. Super-sized data centers will grow Figure 13 Total Number of Households in Developed and
from 338 in 2016 to 628 in 2021. By then, oversized database will occupy Developing Telecom Markets, 2012-2022 Unit: million
53% of the data center market share.
Figure 10 Oversized Database Market Share Forecast

Figure 14 Total Number of FTTx Coverage in Developed and
Developing Telecom Markets, 2012-2022 Unit: million

Edge data centers will add new addresses to fiber-optically connect to access
network, 5G devices and Internet of things devices. The increase in traffic
generated by incoming and outgoing data centers indicates that high-count
cables need to be used to avoid the use of larger numbers of cables in the
future. Traffic in large-scale data centers will quadruple by 2021. At present,
large-scale data centers account for 39% of data flow, 2021 will increase to
55.
Figure 11 Hyperscale DCs Data Flow Forecast
2.China: Optical Communication Boom Continues
Policy Plays a Positive Role in Booming the Market.
The Chinese government has continuously promulgated policies, laws
and regulations to promote the development of the optical communication
industry, which has helped to support the development of the optical
communication industry. Take national strategy “Broadband China" as an
example. It proposes the development goal: by 2020, broadband networks
will cover urban and rural areas in a comprehensive way, with a fixed
broadband household penetration rate of 70%, which brings development
Digitization of Industrial Internet Brings New Driver of ICT opportunity for optical communication industry. And thanks to the policy
Market. of “Belt and Road", countries along the route have jointly promoted the
Currently, digitization moves from the consumer Internet to the industrial construction of cross-border optical cables and other communication trunk
Internet, leading to the bigger and faster-growth global ICT market. The networks, planned and built projects for intercontinental submarine optical
proportion of digital economy in global GDP has been increasing year by cables, gradually formed information and communication networks linking
year, and ICT has gradually infiltrated from personal consumption and all Asian subregions and between Asia, Europe and Africa, and raised the
service, the tertiary industry of public service to the secondary and primary level of international communication connectivity.
industries including manufacturing, energy, agriculture, forestry, animal
husbandry, by-fishery. The rise of the digital economy has brought the Such applications as 5G May Well Brings New Hope for
momentum of development of optical communication industry. Market Growth.
With the maturity of 4G applications, China Ministry of Industry and
Transmission Property of Optical Fiber and Cable Surpasses Information Technology proposes to achieve 5G network commercialization
that of Copper Cable, and the Trend of "Optical Access by 2020. The scale and complexity of data return transmission between
Replacing Copper Access" Continues. base stations in 5G networks far exceed 3G / 4G. That is, large-scale data
As the transmission medium, optical fiber and cable has the advantages of return transmission depends on the perfect layout of optical fiber and cable
high transmission rate, long transmission distance, good anti-interference lines, at the same time, the increase of data volume also requires higher-
and long service life, so it is more suitable for long distance and large quality bandwidth of backbone networks and metropolitan area networks.
capacity data transmission, meeting high demand of 5G’s traffic and network Therefore, peak demand and supply of optical fiber and cables, optical
speed . devices, modules, equipment and other supporting industries around the
construction of 5G will last until 2020.
With the continuation of the fixed broadband speedup project and the
subsequent construction of 5G, the worldwide "Optical Access Replacing China's three major operators are speeding up the 5G pilot layout. According
Copper Access" has become the mainstream trend. to China Unicom's plan, 5G test, as well as business application and typical
Figure 12 2012-2022, Key Markets Optical Cable Deployment demonstration will be carried out in 16 cities; 5G pre-commercial will be
Unit:(Million Fiber-km(Single Mode+Multiple Mode) realized in 2019 and officially commercialized in 2020. Beijing has been
identified as the key city of 5G test in 2018, and the other 15 cities are
Xiong'an, Tianjin, Shenyang, Qingdao, Nanjing, Shanghai, Hangzhou,
Fuzhou, Shenzhen, Guangzhou, Zhengzhou, Chengdu, Chongqing, Wuhan,
Guiyang.

China Mobile will take "5+12" pilot, including Hangzhou, Shanghai,
Guangzhou, Suzhou, Wuhan as the first batch of 5G pilot cities, together
with Beijing, Chongqing and other 12 cities to carry out 5G business
application demonstration.
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