Optical Fibre Cable Demand is Growing
After the telecom bust in 2002 when Brazil’s single-mode cabled-fibre demand plummeted by more than 80%, the rebound in demand appeared to languish through 2006, when in fact growth from 2004 to 2006 was at least 15%, and jumped to 32% in 2007, and then 84% growth was registered in 2008. Much of the deployment during the boom time was in the long haul segment, financed in part by American companies in the utility sector. There has been some additional construction of long-haul routes recently, particularly in the Amazon region, but most of the fibre optic cable deployments have been in the metro or core networks to serve business customers and to reinforce the network as data traffic increases.
Slide 13
Outside Plant Copper Telecom Cable Demand is Flat
Brazil’s use of outside plant copper telecom cable plummeted after 2001 due to the telecom bubble and domestic and regional economic woes. Service providers retrenched and reduced capital investment in new network construction. Telcos also decided that a stronger emphasis on fibre optic cable would be desirable as fibre optic cable usage helps reduce network operating expenses and offers much greater bandwidth than copper cables. Thus the much higher pair count exchange cables that typify deployments in denser population areas were replaced with fibre leading to a drastic reduction in copper cable demand.
The vast legacy infrastructure of outside plant copper telecom cable, however, means that there are a number of factors that will continue to contribute to ongoing demand, i.e., significant repair and maintenance requirements, additional copper pairs needed for local loop unbundling requirements and replacement cable due to copper theft, an activity which always spikes upward when copper prices increase.
Slide 14
Brazil was a net importer of cabled-fibre throughout its history until 2005 when it had almost 200,000 fibre-km available for export markets. Net surplus cabled-fibre peaked in 2007 at almost 800,000 fibre-km and declined to 350,000 fibre-km in 2009 due to stronger domestic demand. Furukawa also opened a manufacturing facility in Argentina that came on line in 2009, but most of Argentina’s fibre optic cable demand is met by Brazilian manufacturers.
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