IBISWorld: Fiber-optic cable installation to remain growing market

The good times for fiber-optic cable installers should continue for the next five years, predicts a new report from market research firm IBISWorld. The company forecasts cable installation revenues to increase at an average of 5.0% per year to $5.5 billion in the five years to 2016. Mobile backhaul and broadband applications will drive this growth, although the influence of the latter will not be a strong as it has been over the previous five years, IBISWorld believes.

The new report is a recent addition to IBISWorld’s array of Specialist Contractors offerings. It covers revenues associated with initial installation, repairs, and maintenance.

The upcoming growth in fiber-optic cable installation will build on the success of the previous five years. IBISWorld estimates that revenues will have grown at an average of 2.8% per year to $4.3 billion in the five years to 2011. Broadband service provision and the increasing data rates demanded for business services and mobile backhaul have driven this growth. IBISWorld points to the American Recovery and Reinvestment Act (ARRA) as a reason fiber installation growth bucked the economic turmoil of the past few years in the U.S. The broadband stimulus program, coupled with wireless network upgrades, helped industry revenue grow 3.5% from 2010 to 2011, IBISWorld says.

The industry should become even more successful over the next five years. “Consumer demand for high-speed Internet on mobile devices will likely accelerate over the next five years, resulting in the widespread upgrade of wireless network services to compete for the consumer's dollar,” says Justin Molavi, an IBISWorld analyst.

Meanwhile, rural broadband development will continue, and firms such as Quanta Services and MasTec Inc should benefit. Quanta Services is the current market share leader, IBISWorld says.