Hengtong Optic-electrical Co.， Ltd， Chief Engineer Xue Mengchi: fibre industry overcapacity continues in 4G era
4G licensing is coming, what kind of pattern the fiber optic cable market will be as infrastructure? Hengtong Optic-electrical Co., Ltd, Chief Engineer Xue Mengchi said, 4G will bring fiber demand growth, but will not change the situation of overcapacity. Fiber enterprises should have the layout to enhance competitiveness through differentiated markets.
Why fiber overcapacity? A reason is the imbalance between demand and supply. 2002-2011, fiber demand growth is 32% of CAGR in China. However, due to the influx of hot money, supply growing faster than demand which led to a steady fall in fiber prices, and the fiber production capacity exceeded demand by nearly 50%. Another reason is the vicious competition caused by homogenization. “We piled all capacity into the same products, breaking the chain of ecological balance on the same market.” Xue said.
The upcoming 4G is one of the life-saving straws for fiber enterprises to solve overcapacity. Hengtong recently released new series of products to share in 4G era. For cable, it must meet the requirements of signal transmission frequency in 5G-10G transmission, Hengtong`s high speed data cablecan meet the needs of 11.1Gbps transmission.
Another market is pulled by China's broadband policy. Take ODN market for example, the MIIT has issued a requirement for operators. In 2015, FTTH subscribers reach 70 million, covering 200 million households. There agency expects that the annual building and upgrading scale of FTTX broadband likely will be 30 million, ODN market capacity will add 100 billion Yuan newly.
Another growth point is the smart markets, such as smart grids, intelligent transport, IOT and special private network, etc. Along with the development of information consumption, demand in these markets simultaneously increased. However, these products in the domestic application will take some time. "European countries have large market, our application of new technology is relatively conservative, often years later than foreign operators." Xue said.