Fiber for Breakfast: Worldwide Fiber Demand and Deployment – The Near Term Prospects and Drivers

Fiber for Breakfast: Worldwide Fiber Demand and Deployment – The Near Term Prospects and Drivers

September 11, 2020

While communities are seeking solutions to bridge the digital divide amid a global pandemic, those building out fiber networks are seeing varying trends on deployment and demand. Countries like the U.S. are seeing healthy growth in demand and construction of fiber networks, however a mismatch in capacity additions and demands threaten others.

At a recent Fiber for Breakfast live video series, two experts discussed the landscape of the global market when it comes to fiber deployments, as well as what’s happening in the U.S. In short, overcapacity is swelling as demand is weakening in areas like China. That, coupled with construction slowdowns due to the pandemic, have caused Europe, Asia Pacific and Latin America to see a decline in optical cable installations.

According to data provided by CRU, a commodity market analysis group, North America is the only region in the world expected to see a growth in optical cable installations in 2020.

“It seems that cable deployments, generally, have been relatively unaffected from COVID-19,” said Michael Finch, head of wire and cable at CRU. “We’ve seen a strong demand.”

According to Finch’s data, Europe expects to see a 5% decline in installations compared to a 9% growth in 2019. Asia-Pacific (not including China) and Latin America will see a 7% decline in growth this year. Beyond natural trends already driving down optic cable prices, economic slowdowns caused by COVID-19 have halted projects in many countries.

In the U.S., however, those in the construction sector report few barriers due to COVID-19. Unemployment is high, interest rates are low and the housing market has remained steady.

Mike Render, CEO and principal analyst at RVA, LCC., said 2019 was a record year for fiber deployment in the U.S—more than 7 million new homes were passed. This year was poised to be very promising, thanks to new funding opportunities on both the federal and local levels. While the pandemic did impact overall numbers, the growth in the market is still healthy.

“Demand has been strong during this pandemic,” he said. “It’s coming to play both for individuals and communities. They’re saying, ‘we need fiber in our communities in order to survive.’”

Looking to the future, Render predicts that growth will continue. In the U.S., demand is at an all-time high, as is competition. Because the U.S. is facilities- based, it allows varying types of network providers—both public and private—to enter the fiber game. That coupled with low regulation create a perfect storm for deployment.

“Obviously in this world today, things can change on a dime,” Render said. “But at the moment, we’re seeing positive growth rates into the foreseeable future—we don’t see any meaningful competition from another tech. Demand is there, supply of labor and fiber can be a bit of an issue sometimes, but overall the playing field looks good.” 

Finch said while other areas globally are seeing a downturn now, he expects the pandemic will propel them to make future investments. In Europe, for example, the same drivers and usage patterns are there, but the implementation of networks differs.

“I think we can all agree COVID-19 has changed the way we work, and the way employees and companies look to operate now. I think that change is well-known and governments are doing what they can to futureproof our networks even further,” he said. “In Europe, there’s going to be a slight lag time before that can be enacted.”

It is not all bad news though. As COVID-19 has exposed the need for more internet access, many believe that will act as motivation in many countries to start deeply investing in broadband infrastructure.

“I think COVID-19 has really highlighted the digital divide, and I think we’ve seen a huge trench of funding come in,” Finch said. “We do expect the market next year to be equally as healthy as a whole. There are some bright spots on the horizon. Overall, it’s a year to get through and look ahead to 2021.”


Written by:
Kate Jacobson