Corning Europe forecasts robust bandwidth demand

24 May 2002 -- Corning Optical Fiber Europe is forecasting 60-80% growth in bandwidth demand through 2005, according to Derrick E. Wells, Managing Director.

24 May 2002 -- Corning Optical Fiber Europe is forecasting 60-80% growth in bandwidth demand through 2005, according to Derrick E. Wells, managing director.

The Corning forecast is in line with similar forecasts from leading brokerage houses and independent analysts. Merrill Lynch, for example, currently forecasts 85% growth through 2005. RHK forecasts 55% growth.

Wells released the forecast last week in Paris at a closed meeting of KMI's 6th Annual KMI Conference on Fiberoptics Markets in Europe. Corning's UK-based European headquarters has subsequently made the forecast more broadly available through this exclusive release to Lightwave Europe.

Wells said global fibre demand totaled 110 million kilometers in 2001, down 5% from the previous year. According to Wells, Western Europe represented 25% global fibre demand in 2001, making Europe the second largest market in the world, after North America. North America represented 35% of demand; Japan, 15%; the rest of Asia, 20%; and Latin America and the rest of the world, 5%.

Corning estimated that long-haul and submarine fibre represented 20% of the world market; local access, 40%; metro, 35%; and premises, 5%. Long-haul fibre demand experienced the most severe contraction in 2001, Wells said, as funding dried up, capital spending slowed and the industry underwent consolidation. Long-haul demand declined 40% worldwide in 2001, versus 2000, according to Wells. However, metro grew 20% and access 10% over the same time frame. The premises market was flat globally in 2001, he said.

In 2001, Corning estimated total regional fibre demand in EMEA -- comprising Western Europe, Eastern Europe, Russia, the Middle East and Africa, a 30 million kilometers. Wells said the region experienced a 6% decline over the previous year. Western Europe accounted for 86% of demand; 3%, Eastern Europe; 2%, Russia; 5%, the Middle East; and 4%, Africa.

Wells estimated cabled fibre demand in Western Europe at 20 million fibre kilometers, a decrease of 1% over the previous year. Long haul represented 17% of the total volume; metro, 33%; access, 44%; and premises, 6%.

Long-haul fibre demand in Europe declined 51% in 2001, at a much sharper rate than the world average, all the leading pan-European operators slowed spending and, in several cases, closed shop. However, cabled fibre demand in the metro sector grew at substantially higher rates than world averages. Metro grew 27% last year and access grew 19%, Wells said. The European premises sector, which experienced zero growth worldwide, grew a robust 41% in 2001.

By industry segment, the PTTs in Europe were the most active buyers in Europe last year, according to Corning. Well said the PTTs experienced 60% year-over-year growth in fibre demand in 2001. Fibre demand surged 51% among European utilities and 46% among both regional and in-country CATV operators. Demand among pan-European operators, however, plunged 56%.

Wells said that it is still very difficult to forecast a recovery under current market conditions but Corning viewed the telecom slowdown as a "correction, not an ending."

"Personally, what I look for is month to month growth," he said. Fibre build-outs in metro and local access construction will lead the industry out of the recession, he predicted.

Al Furst
Contributing Editor

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