The communications future is fiber
George Kotelly
Executive Editor
A 1993 Lightwave editorial staff study of the next few years` ten hottest fiber-optic growth areas was rediscovered recently during a research file cleanup. The study was a brain-storming attempt to look three years into the future and predict the key driving fiber-optic technology, network and communications trends for Lightwave attention and coverage. This study now makes interesting reading as a 1996 retrospective, especially since this issue`s Special Report is our annual Technology Forecast (see page 35).
Like most forecast studies, the 1993 study was on target for most topics, askew on some and omitted two altogether. To judge the study, comparisons were made, where feasible, against results presented by expert analysts from Kessler Marketing Intelligence (KMI) Corp. during the research firm`s recent 19th Annual Newport Conference on Fiberoptics Markets (see page 6).
Lightwave`s study was on the mark on five topics that dealt directly with optical fiber and its associated components. In fact, current statistics corroborate our 1993 forecast about the increasing installation of optical fiber cable. According to Richard Mack, KMI vice president, optical fiber cable deployment in North America grew from approximately 5 million fiber-km in 1993 to about 6.3 million in 1994, to 7.4 million in 1995, and will reach 8.9 million in 1996. Mack estimates this steady growth should continue and double to 16 million fiber-km by 2001. The two biggest markets during this period are expected to be the local telecommunications and cable-TV markets.
Lightwave also accurately predicted the increasing use of multimode fiber cable. According to KMI analyst Jerry Hobbs, the installation of multimode fiber-optic cable volumes in the United States totaled 550,000 fiber-km in 1994, 730,000 in 1995, and one million in 1996. By 2001, he predicts multimode volume installations at 2.2 million fiber-km, with building backbone networks accounting for 52%, campus backbones for 27%, and horizontal links for 21%.
Similarly, the third successful study topic focused on fiber-optic interconnect products. The boost is this area is verified by KMI analyst Charles Xu. He claims that the North American market for singlemode connectors, cable assemblies, mounted panels, shelves, frames and other accessories topped $200 million in 1994, $250 million in 1995 and should approach 300 million in 1996. Xu says this market should climb steadily to $440 million by the year 2001 and attributes this market`s success to rapid cable deployment by cable-TV, multiple system operators, competitive access providers and telephone companies.
Equally successful was the fourth study selection--foreign and undersea fiber-optic cable installations. In analyzing such worldwide deployment, KMI senior analyst Tom Soja notes that 22.8 million fiber-km were installed in 1995. Of this total, more than 16 million were installed in the United States, nearly 13 million in Japan and 4.5 million in China. This market, says Soja, should almost triple to 63.2 million fiber-km by 2001. By that time, he calculates that China should install twice the volume of fiber as the next-largest market.
Likewise, for Western Europe deployment, KMI analyst Peter Kurze figures that fiber-optic cable demand should run at 4.8 million fiber-km in 1996, of which singlemode fiber should total 91%. Those numbers, proposes Kurze, should grow to 6.5 million and 90%, and 10.1 million and 88%, in 1998 and 2001, respectively.
The fifth study success involves the decreasing cost of installing optical fiber. As quoted on these pages (see Lightwave, August 1996, page 4), Paul Shumate, Bellcore executive director, broadband local access and premises networks, advises that fiber-to-the-home installations are the best long-term network solutions when upgrade cost factors are included. In addition, N. D`Arcy Roche, vice president and general manager, premises systems and services, at AMP Inc., maintains that over the lifetime of a fiber-optic network, cables and parts provide savings of up to $175 per drop after the first year, and as much as $625 per drop at the end of five years.
On the last five topics--fiber-to-the-curb networks, erbium-doped fiber amplifiers, Synchronous Optical Network technology, Asynchronous Transfer Mode technology and dispersion-shifted fiber--the Lightwave forecasts had mixed success. They have proved out in 1996 usage but have taken longer to implement and are harder to market-quantify than anticipated.
Some areas that were omitted in the 1993 Lightwave study, and which have had a marked impact on optical fiber communications, were wavelength-division multiplexing technology, passage of the Telecommunications Reform Act of 1996, and the astounding success of the Internet. Of course, Lightwave immediately covered these topics upon their emergence.
In translating all these trends into sales, ElectroniCast Corp, a San Mateo, CA-based fiber-optic market research firm, estimates that fiber-optic cable and optoelectronics sales should more than double, from $3.2 billion in 1994 to $7.6 billion in 1999, and nearly double again to $14 billion in 2004.
According to Steve Montgomery, ElectronicCast vice president, the communications industry over the past two decades has shifted from an orderly and steadily growing industry to a chaotic marketplace of rapidly changing regulations, complex business relationships, explosive optical technology and dynamic growth. He therefore anticipates that over the next decade demands for more bandwidth in global broadband communications will drive trunk capacity expansion; undersea cable transmission will become less expensive than satellite transmission; and several trends, such as dispersed business offices to suburban and rural areas, increased telecommuting, interactive video and high-definition television, and videoconferencing, among others, will mandate rapid deployment of fiber-to-the-neighborhood and fiber-to-the-subscriber networks.
A quadrupling of related product sales and numerous business benefits expected during the next de - cade represent burgeoning market opportunities in fiber optics.