As we approach the halfway mark of 2014, I thought it worthwhile to share my views on the trends we are seeing in the FTTH and pushable fiber market globally.
Firstly, the market is growing compared to 2013, a view which is backed up by several industry market research papers. For example CRU's report found that global fiber installations are up 13% for the first quarter of the year. I can’t comment on whether this is happening across the board. However what I do know is that our shipments of Miniflex fiber cable and our pushable QuikPush range are up significantly everywhere we sell globally.
Middle East Growth
We are seeing major growth and opportunities throughout the Middle East, especially in Multiple Dwelling Unit (MDU) solutions, as detailed in a previous blog. This seems to be borne out in conversations I am having with various colleagues in the industry around the world – the universal opinion is that the Middle East is where everybody is focused on growth for 2014 and 2015.
In Saudi Arabia, the two major FTTH players. Mobily and STC, appear to be going through a transitional phase. Mobily is consolidating the number of companies who they contract with for FTTH installation, while STC, the market leader, recently celebrated exceeding 830k connections in the Kingdom. However, the company has undergone internal changes during the last 12 months and is re-engineering large portions of its original infrastructure. What is interesting, is that after previously purchasing from low-cost economies, both companies seem to be actively seeking Western cable and infrastructure solutions.
Onto Israel. Israel Broadband Company (IBC) recently launched its new superfast internet service under the brand name Unlimited. It is early days for this new player which is seeking to compete against Bezeq and Hot. With pre-connectorized and pushable fiber solutions gaining traction in Israel for last drops and with IBC’s founding partner Israel Electric Corporation looking to utilize its power infrastructure in the broadband network, I’m pretty excited about the opportunity in Israel and have just engaged a representative in the country.
General activity in South Africa seems to be flat, with limited campus and fiber-to-the-business projects happening, although Dark Fiber Africa is continuing to develop its infrastructure. However, Vodacom has announced a significant FTTH program in South Africa commencing this year with Alcatel-Lucent winning the tender to manage the program. In April, MTN said that after trials that they will launch its FTTH service in June, although this appears to have slipped a few weeks. Separately, Telkom also announced that its FTTH rollout will commence “before the end of 2014”. So, South Africa looks set to see accelerated FTTP installation over the next 18-24 months.
Outside of South Africa, Liquid Telecom continues to roll out its FTTH program in Zimbabwe, Kenya, Rwanda and other southern African countries. It is installing through a mixture of buried and aerial deployments. Liquid has ambitions to be the primary broadband provider in the region outside South Africa, and with current progress looks to be on track to achieve this.
Moving onto Europe, BT’s fiber broadband appears to be gaining speed in Cornwall and other regions. Certainly m2fx has seen a step change in demand for our supporting products. Additionally the market is stepping up a gear in Ireland. It looks very likely that Eircom will accelerate its fiber broadband roll out in early 2015. After the flurry of press regarding Vodafone joining forces with ESB earlier in the year we continue to watch this space with interest.
In mainland Europe, we’re not seeing any major growth and the market seems to be flat – of course that could just be us. However, of particular interest, is that Spain seems to be embracing the pre-connectorized pushable fiber concept. Vodafone Spain officially launched its FTTH service in March, although we believe that it is primarily passing homes rather connecting up homes at this stage.
Across the pond in the United States. m2fx replaced its previous representative in country last year –with a resulting dip in sales in the middle part of –2013, so for us it is difficult to compare like-for-like figures. However, growth over the last 6 months has been very strong, especially in campus and ILEC community FTTP installations. At the national level, clearly Google is making waves with its Google Fiber 1 Gig FTTH program in Kansas City, Austin and Provo and the announcement in February that it could potentially create a further 34 Google Fiber communities. The incumbent MSO and broadband providers are not being complacent. Over recent months both CenturyLink AT&T have announced FTTH plans of their own. The key issue here is that few companies have Google’s deep pockets. Clearly, Google is not needlessly wasting money when it creates its network and is deploying its FTTH network as efficiently as it can. However, the company does have somewhat unique motivations and views on ROI when compared to the other service providers. This is resulting in the incumbents seriously looking at non-traditional installation methods to gain a cost of deployment edge. Most existing carriers are investigating pre-connectorization, pushable fiber and other new ways of deploying fiber, with multiple trials planned or in progress. We’re pretty excited about the prospects in the United States.
In the Caribbean, LIME in Barbados has commenced its FTTH network of some 20-30k homes using pre-connectorized pushable fiber. This solution is likely to be replicated for the other islands across the region.
Outside of our experience, it looks like the whole fiber cable market is booming. The usual conversations with our competitors about how busy they are seem to be borne out by the extended lead-times we are seeing from most of our suppliers as they struggle to keep up with demand. We have seen fiber and polymer lead-times double and sometimes even triple over the last the six months.
So, is the industry on the cusp of something pretty special? It’s looking possible.
Here is to a growing 2014 and 2015 to all readers, whether customer, supplier or competitor.
Image 1 by mikecogh
Image 2 from Openreach