Medium Term Optical Communications
Prospects Bright In China September 18, 2008
China's optical communications
market growth has been trending somewhat with that of the
worldwide market. Driven by China's FTTH, service demand, governmental
policy support and technical progress, CCID Consulting projects growth will
be stable at 18.5%, with revenues exceeding 24 billion Yuan.
CCID expects that, in 2H
2008, optical network deployment to slow as telecom operator spending growth
will decrease. Moreover, the Beijing 2008 Olympics spurred on advanced
network build-out in 1H, so there will be a post-Olympics adjustment in 2H.
At the same time, China's natural disasters in 1H will require repair and
rebuild of damaged communications infrastructure, such as copper and fiber
In the longer term, China's
telecom restructuring will
be providing full services offerings to its Chinese subscribers, which in
turn will drive large scale network upgrades. That's good news for optical
communications vendors, and they will need to understand China's
telecom operators' challenges of offering new, comprehensive, and quality
services. Solutions that protect telecom operators' existing networking
investment while providing an evolutionary path to the optical network will
Source: CCID Consulting, July 2008
1H 2008 REVIEW
communication market, especially with FTTH, has experienced rapid growth in
capacities of 40G and beyond.
Telecom operators will need
to support more bandwidth due to China's rapid growth of broadband.
Mainstream 10G transmission rates can no longer satisfy demand. 1H 2008,
Nortel released its 40G products in China, and it also offered upgrade paths
that helped protect existing communications investments. With the upcoming 3G
licenses issuance as a result of the telecom restructuring, more
opportunities (and competition) for high capacity equipment will present
Cost is the core issue in
China's optical network construction. OTN (optical transport network)
technology offers cost-effective transmission services that can support
broadband and IPTV. To meet mobile base station and dedicated-line packet
bearer requirements, MSTP (multi-service transport platform) technology will
further evolve into packet transport network (PTN) technology. Telecom
operators will benefit from this top-down, evolution strategy that protects
existing investments while transitioning to cost-effective optical
solutions. OTN+PTN will be the development trend.
Green, energy efficient
solutions is the new opportunity, and requirement.
China continues to face
challenges in its ever-increasing demand for energy. “Green IT” has been the
focus of China's optical communication market, especially in FTTH. Fiercely
competitive and low-profit optical fiber and cable markets are facing the
new green opportunity, and only optical fiber vendors that have the green
technologies have the competitive edge. In 1H 2008,
Corning released its new fiber products
with energy conservation features. Combined with Corning's advanced
integrated cabling system, these new products show promise in China's
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Unless otherwise specified,
all information provided is sourced from CCID Consulting.