Brexit: Many questions, few answers for optical communications

June 24, 2016
Last night's vote on Brexit, which will see the United Kingdom leave the European Union, has already sent financial markets tumbling worldwide. However, while many observers on either side of the question think they know what will happen once this initial spasm of protest subsides, it will take years for the true ramifications of the decision to become clear.
Last night's vote on Brexit, which will see the United Kingdom leave the European Union, has already sent financial markets tumbling worldwide. However, while many observers on either side of the question think they know what will happen once this initial spasm of protest subsides, it will take years for the true ramifications of the decision to become clear. This is particularly true of Brexit's effect on the demand for and deployment of optical communications technology. Several questions will need to be answered. They include:How will Brexit affect deployment funding? This one is pretty easy to answer, I think: Funds for deployments (as well as to launch startup companies) will shrink, at least initially. This trend will be hold not only in the UK but around Europe as well, at least until the initial turmoil subsides. And, since world economies are intertwined, capital may prove more difficult to find elsewhere around the glove as well.How will it affect traffic patterns and therefore network builds? London has been a financial center for the EU – but many doubt it will retain this status. That means less demand for connectivity going in and out of London, which is bad news for the fiber-optic network services providers who have invested in new builds there. On the other hand, if financial power moves to other cities, those markets will need more connectivity. So we could see the epicenter of European fiber network deployments shift. This holds for submarine networks as well. Once the UK is outside of the EU, countries within the EU may not want their traffic flowing through the country because the UK will no longer be bound by EU privacy standards or other communications-related policies. Again, we may see submarine builds on new routes.What about optical communications companies? The EU has funded a variety of optical research projects that have seen participation by UK universities and companies (see, for example, "MODE-GAP unveils first few-mode fiber amplifier"). That's likely to change, which means a funding source for technology development in the country will likely dry up. Meanwhile, UK companies will have a slightly harder time acquiring engineering talent from the rest of Europe if immigration restrictions tighten. The process of extricating the UK from the EU will be long, excruciating, and full of uncertainty. And uncertainty has never been a friend of optical network deployments. The questions above have yet to be answered. But I fear when the answers come, we won't like them.
About the Author

Stephen Hardy | Editorial Director and Associate Publisher

Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.

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