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With the launch of 5G services, the focus has never been on the deployment of fiber optic infrastructure. The industry will invest Rs.22 crore towards fiber optic infrastructure in the next few years with players in the spotlight such as STL (Sterlite Technologies), HFCL and Polycab.
Eyeing the huge opportunities brought by the launch of 5G and fiber-to-home services (FTTH), enterprises are focusing on expanding capacity and opening up new markets to capture domestic and international demand.
The new opportunities for Indian fiber optic cable manufacturers are enormous. Rapid and structured fiber optic rollouts on a large scale in India will provide a tailwind for the sector.
EY and DIPA estimate that setting up the digital infrastructure for the smooth rollout of 5G will require an investment of Rs 59000-9300 crore in fiber deployment and microwave over the next five years.
But challenges remain. Rising raw material costs, logistical problems and a weak economy can be major hurdles.
Unprincipled trade practices continue to pose a threat to the OFC industry. Several foreign companies are frequently dumping low-quality fiber into the Indian market at predatory prices, affecting Indian manufacturers.
“Our continued focus on innovation in product development has allowed us to scale. We need to help our customers solve their network challenges and scale up their deployments. and believe there is a real chance for STL to scale and become one of the top three (fiber optic players) in the world in the coming years,” said Ankit Agarwal, CEO and MD, STL. I’m here.
When it comes to backhaul fibre, only 35% of towers in India have fiber connectivity and need to go up to 70% to unlock the full potential of 5G-based services.
Ashish D Jain, Executive Vice President and COO of Telecom Business, Polycab India, said: Connection density will boost the global fiber optic market. “
Jain said fiber requirements are expected to be at least 10 times higher per site, although much will depend on the nature of the 5G deployment.
big global opportunity
According to market experts, fiber optic players will benefit greatly from the 5G/FTTH deployment cycle both domestically and globally. 5G and FTTH deployments will drive up prices and global demand will grow from $9.2 billion (502 million fiber kilometers) in 2021 to $12 billion (610 million fiber kilometers) by 2024, growing at CAGR becomes 10%. to the market report.
The major beneficiaries of the strong demand for fiber optic cables are the increasing fiberization of towers, the rollout of 5G across the region, the growing opportunities for FTTH and the BharatNet project in India as a major opportunity. According to estimates, the global market for cables and interconnects will reach $20 billion, with great demand in both the US and European markets for FTTH and broadband space.
Today, STL exports approximately 80% of its fiber optic cable and networking products to global markets, including the United States and Europe. STL has plans to expand his current 33 million km of fiber capacity to his 42 million km. STL has established manufacturing divisions in the United States and has manufacturing divisions in India, China and Italy.
Polycab has presence in the Middle East, Europe, and the United States, and is in the process of further expansion to other countries. “In the wake of the imminent rollout of 5G in the country, we are already on the way to increasing our capacity to meet market demand,” Jain said.
HFCL will deploy Reliance Jio’s backbone and backhaul OFC & FTTH networks in northern India, step by step to increase OFC capacity from 25.08 million fkm to 35.08 million fkm per year and optical fiber manufacturing capacity to 24.94 million fkm making plans. 10 million fkm in phases with increased production at the Hyderabad facility. We are establishing a new assembly unit in the NCR region for the manufacture of telecom and networking products.
HFCL Managing Director Mahendra Nahata said: As well as leading the industry in the fiber optic cable space in India, HFCL has stepped up its efforts to strengthen its global footprint, leading to significant orders from Europe. ”
HFCL has five manufacturing facilities in India and exports account for 18.30% of total revenue and is expected to outpace domestic revenue growth in the coming years. According to HFCL’s investor presentation, it plans to focus on new geographies, particularly Europe, North America and Africa as potential markets.
In India, with the introduction of 5G, domestic fiberization will increase by almost three times to 60 million fiber kilometers (fkm) per year, driven by fiberization of towers and small cells. 5G will require up to four times more fiber-backhauled small cells. In the next four to five years, India will have 300 million of his 5G users, 100 million fiber optic homes and 600,000 villages connected by his Bharatnet.
“One big player, an organized and structured player, has a role to play in using digital tools to bring value to structuring this part of fiber deployment,” said Agarwal. .
far ahead
Rising raw material costs, logistical problems and a weak economy can be challenges.
“In India, there are different RoW regulations and fees for different states and districts. The cost of laying fiber varies from city to city. They are reluctant to connect,” said Jain.
“STL will continue to focus on our optical business and look at how we can improve our interconnect connection rate. We talked about a 40% attach rate by fiscal year 25. We are also excited about the service business, especially India, and perhaps more focus on the private sector,” Agarwal said.
According to Jain, the RoW-regulated single window clearance goes a long way in helping fiber rollouts run quickly and smoothly.
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