Page 40 - Market Analysis Report of Optical Communications Field in China & Global market 2018

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According to statistics from the Ministry of Industry and Information manufacturing of deep-sea submarine cables, in which HTGD has completed
Technology of China, in the first half of 2018, the length of optical cable 5000 meters of deep-sea testing. Huawei has the world's leading technology
route across the country reached 40,238,864 km, an increase of 2,764,825 km in optical communication technology in the field of submarine cable
or 7.37% over the end of 2017, of which the length of long-distance cables transmission. In terms of project experience, optical cable of HTGD and ZTT
reached 1,055,174 km, an increase of 13,786 km. has entered the European and American markets; Huawei Ocean has become
one of the world's important submarine cable system integrators, with general
According to statistics, in 2017, China's optical fiber preform production contract delivery capacity and experience of transoceanic cable.
capacity reached 9500 tons, an increase of 16% to 21% over the same period Figure 21 List of Submarine Cable Landing China
last year, including 7800 tons of self-produced optical fiber preform, an
increase of 26% to 28%; the country’s optical fiber production capacity was
360 million kilometers, an increase of 6% to 11% over the same period last
year; the country’s optical cable capacity was 400 million fiber-kms, with
an output of 360 million fiber-kms, among which 35 million fiber-kms were
exported.
Figure 19 Statistics of Optical Preform, Fiber and Cable in China

China's Submarine Cable: Enhanced Competitiveness but
Underdeveloped From a technical point of view, YOFC and HTGD not only have optical
The construction of China's international submarine cable resources basically preform manufacturing technology, their optical fiber expansion is also more
meets the rapid development of international interconnection needs. In recent active, meaning that companies met their own optical cable manufacturing
years, Chinese operators have become the main initiators and leaders in the needs, but also sold optical preform and fiber in the past two years. It is
construction of international submarine cables. Besides, to achieve direct estimated that some of the production capability of optical preform will be
access to more countries, Chinese operators are also actively applying for released in the near future. Once China's planned optical preform production
cable landing permits and business licences from relevant countries. capacity go into operation, the production will meet the global demand for
fiber drawing. At the same time, YOFC and HTGD have launched joint
Compared with the future international traffic development forecast and ventures with smaller domestic optical fiber companies, such as Xinmao
the major countries in the world, China's international submarine cable Technology and Southern communication, targeting the supply of optical
development is still insufficient. The number of submarine cables in the preform, while also hedging against investment risks caused by overcapacity.
United States is 8 times that of China, while the per capita bandwidth is These movements guarantee leading position of YOFC and HTGD in industry
nearly 20 times that of China; the number of submarine cables in Japan is development. ZTT, Futong and FiberHome, leading optical communication
more than twice that of China, while per capita bandwidth is nearly 10 times companies in China, also have their own optical preform manufacturing base
that of China; the number of British submarine cables is more than five times and vertical integration capability of preform, fiber and cable, contributing
that of China, while per capita bandwidth is 72 times that of China; and the greatly to the prosperity of the industry. Over the past few years, these
number of Singapore submarine cables is more than twice that of China, companies have gone abroad to set up sole proprietorships and joint ventures,
while the per capita bandwidth is 262 times that of China. and conducted expansion along Belt and Road. At present, the effect of
external expansion is very remarkable, as optical fiber and cable in China is a
ii. Performance of Mainstream Optical Fiber and Cable relatively mature product. Quality control and cost control of Chinese optical
Manufacturers in China fiber enterprises also have strong competitiveness in international market.
In recent years, China's optical fiber and cable industry has entered a period
of vigorous development, with production and sales accounting for more than 2.Scale and Features of Optical Communication
50% of the world share. In the manufacturing field, China's optical fiber and Equipment Market
cable manufacturing is led by five big enterprises including YOFC, HTGD,
FiberHome, ZTT and Futong. As of June 30, 2018, YOFC’s 2018 revenue I. Global Optical Communication Equipment Market
was 5.63 billion yuan, an increase of 21.24% over the same period last year. In 2017, because of the popularity of 4G network and not-yet-starting 5G
In 2017, its revenue topped 10 billion yuan for the first time, up 28% from network construction, the global equipment market growth is weak, the
a year earlier to 10.366 billion yuan. HTGD, Futong and ZTT three multi- growth rate slowed. In 2017, the global optical communication equipment
business enterprises’ optical communication business is also moving to tens scale is 269.46 billion U.S. dollars.
of billions. However, industrial growth as a whole began to slow in 2017, Figure 22 Global Optical Communication Equipment as a Proportion
with the optical fiber industry entering a stable and prosperous phase after of Communication Equipment Market in 2017
years of rapid growth. China’s optical fiber and cable industry’s structure unit: 100 million U.S. dollars
and competitive situation are relatively stable, with main shares scattered
in YOFC, HTGD, FiberHome, Futong, ZTT, Tongding, SDGI, Yongding,
Tongguang, Potevio and other enterprises. Taking the production capacity of
enterprises into consideration, these representative enterprises accounted for
more than 90 percent of the market share of optical fiber and cable in China.

HTGD, ZTT and Tongguang have achieved breakthrough in the
Figure 20 China's optical fiber & cable enterprise market share

Europe and Asia Pacific are Well Developed.
In 2017, the European Union's "Broadband Europe" strategy kept its growth
rate ahead of the world. The strategic goal of Broadband Europe is to achieve
high-speed broadband coverage in European countries by 2020. Asia-Pacific
countries, including Thailand, Cambodia, India, Malaysia and Vietnam,
are actively improving the ICT development environment and accelerating
national broadband construction. Japan, South Korea and other developed
countries are also actively engaged in 4G densification construction. China
Unicom's mix reform progress and China Mobile's successive bidding from
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