Pan-European fiber deployment to decrease sharply, claims report

Fiber deployment on long-distance routes by Pan-European carriers will fall dramatically in 2002, claims a new report from KMI Research (Providence, RI). Pan-European fiber deployments peaked at 57,000 route-km in 2001; deployments in 2002 will be only a tenth of those in 2001.

As network sizes and fiber counts increased, fiber deployment grew exponentially, claim KMI analysts. Starting with 180,000 fiber-km in 1997, pan-European carriers deployed 1.3 million fiber-km in 1998, 4.3 million in 1999, and 6.1 million in 2000, for a compound annual growth rate of 225%. Deployment declined to 5.6 million fiber-km in 2001, due to the large proportion of undersea construction.

A flood of new pan-European carriers entered the market from 1998 until mid-2000, driven by steep acceleration of bandwidth demand, the deregulation of European telecommunications markets, and the emergence of new telecommunications technologies. By route size, network deployment grew from almost 3,600 route-km in 1997 to roughly 15,000 in 1998; 43,000 in 1999; 53,000 in 2000; and 57,000 in 2001.

Following this massive build-out, however, pan-European network expansion is coming to a halt this year and into 2003. The decline results from the end of a construction cycle, less availability of financing, falling capital expenditure budgets, and business performance problems that have led some carriers to bankruptcy procedures, contends the report. Of the 27 carriers profiled, 5 are experiencing financial difficulties or have sold their networks. Though carriers are planning to deploy 580,000 route-km this year, some of that could be cancelled. KMI predicts that fiber deployment will dip again in 2003, to 180,000 fiber-km, just enough to bring fiber to prospective cities not yet on major networks. Today's carriers are focused on getting the most out of their existing assets, and that trend will likely continue.

KMI defines fiber-based carriers as providers that have purchased and installed their own fiberoptic cable on at least some portion of their pan-European network, including carriers that purchase IRUs on empty innerduct and pull their own cable. Both terrestrial and undersea segments of pan-European networks were studied.

KMI's report, "Fiberoptic Networks of Pan-European Carriers: Market Developments and Forecast," profiles 27 major fiber-based pan-European carriers, highlighting their own-built network, segments under lease (indefensible right to use or IRU), and network plans. For more information, visit the company's Web site at www.kmicorp.com.