The Future of Optical Fibre Communication Network

The global OFC market is expected to pick up from early 2025 and should augur well for the entire industry with the expected uptake in the augmentation of existing 4G networks and the new build-up in the stand-alone 5G networks. It is expected that by 2025-26, at least 75 percent of India’s cell towers will need fibreization for a full scale.

Mr. R. Sridharan, Chief Executive Officer – Birla Cable Ltd. & President – Vindhya Telelinks Ltd.

Global and Domestic Optical Fibre Cable Markets
The global optical fibre cable (OFC) market faced several challenges, including elevated inventory levels, lower investments by telecom operators due to high interest rates and an uncertain economic environment coupled with geopolitical disturbances witnessed during the second half of 2023, which continued in the first half of 2024 as well.
Excess manufacturing capacity proved difficult to consolidate, particularly in China which is still the largest consuming country in terms of substantial volumes of OFCs. The same was the case in both North American cable markets as well as in the European continent, putting enormous pressure on yield levels in the overall business.

In fact, the industry had witnessed a huge drop in the bare optical fibre price levels by almost 50 percent as compared to the price levels in the beginning of 2023. On the positive front, the global OFC market is expected to pick up from the early 2025 and should augur well for the entire industry as a whole riding on the expected uptake in the augmentation of existing 4G networks and the new build-up in the stand-alone 5G networks for mobile communication requirements along with the huge reach-out goals set out by various countries with the expected roll-out of Fibre-To-The-Home (FTTH) networks.

As far as the domestic OFC market is concerned, India is the largest market in the Asia-Pacific (APAC) excluding China region with a contribution of over 27 percent in the regional cable demand. However, in the second half of 2023, the demand from private carriers and ISPs halted and ultimately drove down the cable consumption in India by 17 percent from the previous six-month level. As a result, the overall cable market contracted by 8.8 percent in 2023, with the total cable consumption in India coming down to 16.4 million fibre km.

Further, the initiation of Anti-Dumping Duty Investigation by European Commission on imports of OFCs originating from India and the subsequent imposition of Provisional Anti-Dumping Duty on the Indian OFC manufacturers has added to the challenges of the domestic cable industry.

Overall, the period starting from the second half of 2023 and the entire calendar year of 2024 can be categorized as a valley in the overall business cycle due to various reasons as elucidated. However, the overall situation is expected to improve from the early 2025 and it is estimated to pick up with robust demand in the coming years, especially with the long awaited BhartNet Phase III tender which was announced and all the major players have participated in this opportunity, as it involves huge route kms of OFC requirement.

This project upon finalization is poised to significantly strengthen the domestic demand in the coming years for OFCs, as it involves the connection and upgradation of existing 164,000 gram panchayats and also connect around additional 47,000 gram panchayats. Further, rise in the need for fast and improved networking and network services, increased penetration of broadband services and huge expansion in setting up of data centres in India to cater to the needs of increased data consumption by the masses are expected to be the major growth drivers for the domestic OFC consumption.

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Market Segments
In general, OFC markets are categorized into the following focus segments.

• Government-Driven Telecom Network Projects
• Private Telecom Operators in both existing 4G & new 5G Mobile Communication Network
• Fibre-To-The-Home (FTTH) Network
• Internet Service Providers (ISPs)
• Power/Energy Utility Network
• Oil & Gas Pipeline Network
• Road Transport and Highways
• Railways and Metro Rail Network
• Data Centres
• Defence Network
• Renewable Energy Network – both Solar & Wind for SCADA applications
• Private Data Centre Network
• Tactical Communication Network in Defence Applications
• Indoor Communication Network
• Long Distance Submarine Communication Network

All the above market segments require both underground and aerial type of Optical Fibre Cables based on various network topologies except in Indoor and Submarine segments.

Available and Upcoming Optical Fibre Cable Products
The current range in OFCs generally falls under the outdoor range in both underground and aerial types, indoor segments. However, new age applications require micro or mini OFCs where space constraints are encountered during the network build-up, which are in reduced overall cable diameters.

Some special types of fibres like bend-insensitive OFs are used in these types of smaller micro or mini cables, thereby providing improved bend performance of the cables during installation as well as during the operational cycle of the entire OFC network. These types of new age cables are coming up in the market, driving the innovation potential of the industry as a whole. Also, new age types of specialty optical fibre drop cables are being installed in the access and last mile connectivity networks, thereby enabling faster connectivity to the huge subscriber demand for OF-based network connections.

Technologies Used and Significant Innovations Anticipated
As the evolving network technologies require varied designs and innovative approaches for cable manufacturing, the OFC types are undergoing tremendous variations and new designs are coming up in the industry. Special designs of cable require new manufacturing tools and machinery which drives innovation in the manufacturing machinery designs and ultimately delivers best-in-class cable products in line with the futuristic telecommunication network requirements. Bare optical fibre, the main raw material in the manufacturing of cables, is also undergoing a lot of research and development. New speciality fibres are expected to be introduced in the near future, which will definitely pack more data coupled with ultra-high speed communication networks and very low latency standards.

Sustainability
Sustainability is the key for the futuristic development of the OFC manufacturing industry as it should be environmentally safe in terms of usage of raw materials and its selection to start with. Introduction of environmentally-safe manufacturing practices, adoption of large scale recycling methodologies in the manufacturing process, which will ultimately pave the way for sustainable manufacturing operations, are good indicators for the proper implementation of regulatory requirements in a systematic way. Some of the steps like conservation of water resources coupled with regulated use and renewable energy usage in the cable manufacturing industry will be the key for sustainable business operations, which some of the major OFC players have already adopted.

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Challenges
Like every other industry, OFC manufacturing segment also faces challenges in terms of policy changes from government authorities, trade-related issues, quick need to adopt and implement technological up-gradation in the process as per the requirements, foreign currency fluctuations, geopolitical disturbances and other related operational challenges. However, with the skills and experience available in the telecommunication segment, it is a well-established fact that the industry raises its bar and continues to deliver stupendous performance and ultimately overcome any type of challenges.

The Future
Based on optical fibre’s unmatched capacity to transmit data efficiently, economic development is predicted on national access to robust, future-proof fibre broadband infrastructure networks. While the US, China and Japan have fibre km per capita of 1.34, 1.30 and 1.35 respectively, India trails with 0.09 km per capita, which is only about 7.5 percent of these nations. The US, China and Japan have 85 percent of their cell towers fibreized, while India still lags at about 38 percent. The telecommunication network planning experts suggest that by 2025-26, at least 75 percent of India’s cell towers will need fibreization for a full scale launch of 5G mobile communication services, requiring an investment in the range of INR 1.5 trillion to INR. 2.5 trillion.

Meanwhile, small cells are emerging as a critical component of the global 5G communication network roll-out strategy, given that most telecom operators are using millimetre wave spectrum, which has higher capacity rates but covers smaller distances. Thus, radios need to be closer than in 3G or 4G, making small cells a natural fit for 5G roll-out. Each small cell needs to be backhauled through optical fibres, further strengthening the case for the importance of fibreization in the 5G network deployment.

To summarize, there is a tremendous scope for Optical Fibre Cable network deployment in the telecommunication network to catapult the country’s telecom infrastructure into a robust network and for fulfilling our nation’s overall growth target.