Fiber optic networks have undergone significant improvements over previous generations of fixed networks. This results in expanded connection capacity, faster bandwidth and improved user experience.
Driven by both technological advancement and stronger demand in the enterprise market, fiber optic networks are creating a new round of infrastructure construction and application opportunities.
According to EY, we are entering a new era of informatization and global digitalization, whereby data, communication and computing power are exponentially increasing. Thus, five trends namely, demobilization, ubiquitous intelligence, ultimate sensation, fluctuating demand and network polarization influence the necessity of deploying upgraded optical networks.
Telecom Needs Fiber Optics
By 2030, the global fiber optics market is estimated to be worth over US$ 10 billion and the telecom sector accounts for the largest revenue share in this market. Projected to retain its position over the years, fiber optics offers promising growth aspects due to its increased adoption in data transmission services and communication. This technology is enabling the high-speed transfer of information in both long and short-range communications, while also stimulating video-on-demand (VoD) service, cloud-based applications and other audio-video immersive reality services.
Together, wireless 5G and wireline optical networks work hand-in-hand to provide ubiquitous connectivity — a secure connection from one point to another. Indeed, optical communication aids the development of infrastructure, technology and applications to build a smart ecosystem using optical fibers.
Industry researchers note that optical fiber cable (OFC) manufacturers are bracing to meet a multifold increase in fiberization, aggressively tap global markets to power 5G services and cope with demand from fiber-to-the-home (FTTH) fixed broadband.
Moreover, the rapid development of emerging applications requires an advanced network that could be supported by fiber optics. Optical transmission links can carry the increasing data traffic, and the optical access end also needs to ensure optimal network experience with lower latency and higher reliability.
Based on a comprehensive analysis of modern network feature requirements, smart manufacturing and smart grid may become major fiber-optic network scenarios. On the other hand, smart agriculture and enterprise cloudification may accompany the popularization of fiber optic networks, in combination with Wi-Fi 6, to serve as a potential fiber-optic network scenario.
In the Industry 4.0 era, an all-optical network empowers traditional industries, and given the continuous iteration and upgrade of telecom networks, real-time monitoring and industrial data communication of high-speed M2M/M2S networks can be implemented through fiber optics.
Fiber Optics Investments
Rising connectivity demand for high bandwidth is flourishing the fiber optics market growth. Especially for the telecom sector, the evolution of fiber-integrated infrastructure has magnificently boosted the demand for fiber-optic cables. Furthermore, increased deployment of broadband network architectures such as FTTH, FTTP, FTTC and FTTB have prominently escalated the demand for fiber-optic networks, and thus driven the demand for fiber-optic cables.
Corning is expected to open its fiber-optic cable factory in Gilbert, Arizona by 2024. The leading fiber optic manufacturer said that the investment is supported by customer commitments, including AT&T, which is also working with Corning on a fiber optic technician training program. The telecom operator also announced its plans to build its first fiber network in Arizona that will offer service to more than 100,000 homes in 2023.
As a fiber-optic innovator, CommScope continues to be at the forefront in developing and producing high-performance fiber connectivity for the most demanding networks. The company’s fiber optic cabling systems typically meet and exceed the highest standards because they also set the industry’s standards.
Interestingly, some of the first FTTH networks were installed by incumbent providers such as Verizon Fios, which started building out consumer fiber service in the early 2000s. Verizon now connects nearly 48% of its cell sites with its own deployed fiber optic cables and is on track to reach about 50% by the end of 2022.
Adtran also helps build full-fiber networks by leveraging passive optical network (PON) technologies that deliver gigabit access to homes, businesses and for infrastructure backhaul.
Lumen is utilizing Corning’s latest optical technologies — SMF-28 ULL fiber and SMF-28 Ultra fiber — to upgrade its intercity infrastructure and add network capacity to its network. Lumen has upgraded over 24,000 route miles across its US intercity network which enhances network performance levels and supports the deployment of its next-generation optical platform. This platform is designed to handle the digital era’s increasing network traffic.
On the other hand, Swedish connectivity provider Arelion will build two high-capacity fiber optics routes between the US — via Texas — and Mexico.
Growth Outlook on Fiber Optics
Since the first international ITU Recommendation for optical fiber was established in 1980, optical fiber cable technology and associated international standards have significantly evolved. As a result, optical communication continues to be deployed worldwide, greatly improving the quality of lives with better connectivity.
While countries around the world continue to foster telecom upgrades, there is still an imbalance between regions due to significant differences in technology accumulation, investment and industry development. Specifically, the network coverage rate and optical fiber penetration rate differ greatly at various development levels.
Initiatives, policy reforms and investments, together with operators' positive response to construction using optical fibers accelerates evolution to the optical information era. Because of this, chip, module and optical fiber manufacturers will experience beneficial results as a greater range of optical fiber applications become available.
The enormous size of the telecom industry means that switching to new fiber materials will be challenging. Silica fibers are relatively inexpensive to manufacture and use but the recent appearance on the fiber optics market of new materials may spur fiber manufacturers to redouble their efforts to explore alternatives.
The level of global interconnectivity that defines today’s digital world is heavily shaped by fiber optics. The world’s reliance on these light conduits will continue to grow and is bound to be more advanced.
According to Huawei, international capital is shifting investments to acquiring optical fiber assets. Many governments are realizing the importance of getting involved in digital infrastructure construction while fiber deployment techniques, including micro-trenching, air blowing and fiber splicing-free techniques, have become increasingly mature. All-optical infrastructure is becoming more popular than ever, and in the United States alone, an investment of US$130-150 billion in fiber infrastructure is anticipated over the next five to seven years to adequately support broadband competition and rural coverage. This massive fiber investment, involving fiber optics, will come from CSPs, financial investors and public/private collaboration.