Three Aspects of the Cable Market Opportunity in 2013

After the shortage of the cable market in 2012, the domestic cable industry passed another year of rapid development. Thanks to the large-scale implementation of the broadband speed-increasing project, the three major operators have vigorously promoted the construction of FTTH, effectively boosting the market demand for optical fiber and cable, and the cable manufacturers have also earned a lot of money. However, judging from the experience of upstream system equipment manufacturers, the communications industry has ushered in the winter period, especially in the second half of 2012, many of the three major operators have postponed their procurement projects, and operators’ investment enthusiasm has begun to slow down. In the upstream and downstream communication industries, it is a warning.

Has the fiber optic cable market boom in the past year been reproduced this year? It is still an unknown number. One of the concerns for the industry is that China Telecom and China Unicom’s enthusiasm for comprehensively promoting fiber-to-the-home has declined due to a low return on investment, which may affect the new round of cable harvesting. In 2013, what are the major opportunities for the cable market?

TD-LTE pull dominates

Judging from the investment plans of operators this year, China Mobile's investment in TD-LTE will undoubtedly become the focus of attention of all parties. Huawei, ZTE, Ericsson, Shanghai Bell, and the five major equipment manufacturers of NSN are all gearing up to expand their market share in this year's TD-LTE deployment. TD-LTE has become a major keyword for the communications industry this year. It is reported that China Mobile's TD-LTE scale-up experiment in 2013 will start soon and build 200,000 TD-LTE base stations. It is expected that the bidding for TD-LTE main equipment will be launched in May, and the overall scale will reach RMB 20 billion.

The expansion of TD-LTE deployment will significantly boost the demand for domestic fiber optic cable market. Huang Xiaoqing, president of the China Mobile Research Institute, pointed out that China Mobile's current base station backhauls are all implemented through optical fiber networks to effectively ensure the transmission quality of wireless networks. Follow-up With the large-scale deployment of TD-LTE, the demand for optical fiber cables will be further increased. China Mobile has already defined the TD-LTE dual-hundred plan this year: through the new and upgraded methods, TD-LTE network coverage will be completed in more than 100 cities nationwide, and 1 million TD-LTE terminals will be purchased at the same time. The LTE network covers more than 500 million people. China Mobile has a large investment in the construction of the access network. Although there is no fixed network operating license, the overall size of its access network even exceeds that of the other two fixed network operators. In addition, it is worth mentioning that China Mobile’s collection and recovery of optical fiber and optical cables over the years is close to the sum of the other two operators, and the deployment of TD-LTE will further expand its collection and extraction capacity for optical fiber cables.

The strategic deployment of China Mobile in TD-LTE is very significant for the upstream and downstream communications industries, with the exception of G. In addition to ordinary optical fibers such as the 652D, the demand for special optical fibers such as low-loss and anti-bending is also rising. At the same time, the demand for optical devices will also increase.

FTTH driving force steadily rising

After the introduction of the broadband speed-increasing project in 2012, the three major operators significantly increased the proportion of investment in broadband networks in the first half of last year. China Telecom was particularly prominent. Companies in various cities were allocated FTTH metrics, and the nationwide promotion of fiber to the home was widespread. The transformation and upgrading of the entire China Telecom Group will basically run out of the entire year's broadband investment in the first half of the year, showing that its construction efforts are large. However, with the waning investment enthusiasm in the early stage, given the low return on investment, China Unicom and China Telecom have slowed down the pace of FTTH promotion in the second half of the year, and the entire domestic wave of broadband construction has also stabilized. According to the completion of the broadband acceleration announced by the Ministry of Industry and Information Technology, the completion of the broadband speed increase in 2012 exceeded the expected target and completed the broadband speed-up task throughout the year.

According to the progress of the broadband China strategy and the Ministry of Industry and Information Technology's 2013 broadband speed target set by the three major operators, the target task is equivalent to last year's level, and under the condition of no national financial support, the three major operators will accelerate the broadband speed. The construction of the investment will be more combined with investment income, and investment in broadband network construction will still maintain a certain proportion, or be the same as last year. In the context of the rapid development of IPTV services, the profit return of telecom operators on fixed-line investments has also started to rebound slightly. To ensure the market competitiveness of broadband networks, the scale of fixed-line investment can not be underestimated.

Operators' fixed-network investment will directly play an active role in promoting the optical fiber and cable market. Optical fiber, as the main carrier of broadband networks, will effectively increase the user's broadband Internet access rate. The "Broadband China 2013 Special Action Plan" proposed by the Ministry of Industry and Information Technology will effectively promote the rapid growth of China's optical fiber cable market.

Smart grid continues to advance

In addition to telecom operators continuing to increase the fiber-to-the-home transformation process, the State Grid is advancing rapidly in the process of advancing the smart grid for household-side homes. In order to promote the implementation of smart electricity and other related applications, the power system is near. In the past two years, a large number of smart grid pilot projects have been carried out. At home access terminals, users have begun to promote the use of power-to-the-home technologies. While providing access to wires, they can simultaneously implement fiber access based on user needs. It is understood that users who access the Internet through power optical fiber access have also been effectively protected. The improvement of user experience lays the foundation for the subsequent large-scale promotion.

The implementation of power fiber-optic access has provided new development opportunities for domestic cable manufacturers. Domestic cable companies including Zhongtian Technology and Hengtong Optoelectronics have achieved mass production of low-voltage composite cables. In addition, the implementation of the smart grid strategy will also significantly boost the domestic cable market demand. According to the strategic deployment scale of the national grid, the smart grid will continue to promote the development of the entire power market in the next few years. This is also effective. The market demand for power cables in the coming years is guaranteed.