Study confirms 2001 cable over-production

A newly-published web-based survey confirms that millions more kilometres of cabled-fibre were produced in 2001 than were actually needed for real installations.

As part of KMI's investigations for its annual Worldwide Report on Optical Fibre and Fibreoptic Cable Markets published last December, it was estimated that as much as 16m fibre-km in inventory could affect the cable market in early 2002.

Most years, KMI assumes some cable is carried over from a previous year, but that amount is believed to not significantly vary from year to year. So, the amount of cabled-fibre installed is equivalent to that made.

In 2002, however, there was a significant accumulation of cable from 2001. KMI says the previously announced inventory of 16m fibre-km could be as much as 18m fibre-km. KMI will determine the volume of cabled-fibre in 2002 as part of its annual update this November.

Also, in an e-mail survey of 2016 industry magazine readers, evenly split between the US and the rest of the world, identified as having purchasing influence on fibre-optic cable, two US respondents reported an extra 13m fibre-km of cabled-fibre held over into 2002.

Change in corporate strategy (37%) and capital budget adjustments (30%) were the most common reasons for higher inventory.

Fibre carried over from 2001 and 2002 may partially offset demand for new cable in 2002. This is probably true for carriers that have on-going demand for fibre to maintain and expand their networks. Much of the excess inventory, however, is attributed to carriers that are restructuring, exiting the telecom business, or otherwise unable to continue with construction plans.

The range of cable designs, fibre counts, and performance specifications make it unlikely that reels of cable are transferrable from one application to another or from one carrier to another. In fact, much of the 18m fibre-km excess inventory is high-count, high-performance cable for long-distance applications, and other operators may not require these counts or fibre types.

The resources to install much of this surplus are not available, and may not be available for years. For this reason, much of the 18m fibre-km is likely to remain uninstalled and should not dampen future demand beyond 2002.

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