Dark fiber growth of 15% per annum is forecast in central and eastern European markets during the next five years, according to a new report from BroadGroup.
In the report, European Dark Fibre Markets, a detailed analysis of current and future deployment, pricing, products, and provider companies is provided, against the background of changing trends, technologies and emerging customer segments.
Pricing and cost structure of dark fiber forms a special focus of the report, and the findings suggest that while price declines continue to be sustained, the true value of dark fiber as a strategic asset will become increasingly evident during the forecast period. The report found that while traditional telcos in western European markets have largely halted the sale of dark fiber, other "markets" are thriving away from established centers and players.
Significant variance occurs in dark fiber prices across the entire region, when measured on a per kilometer basis. The report suggests that dark fiber prices will continue to decline, primarily due to the current consolidation of fiber networks, but also the upgrading of new DWDM networks allowing capacity of up to 40Mbps per fiber pair to be made available.
The forecast growth (by fiber km) during the period 2005-2010 for western Europe and central and eastern Europe is approximately 60%. As a result, the share of dark fiber in the emerging markets as a proportion of the whole of Europe will grow from the current level of 27% (end 2005) to around 50% by 2010.
New products and services built around dark fiber are emerging, as the IRU continues to decline in use. The report suggests for example that more complex bundled products for enterprise users are emerging.
The report also comments on the need for a more efficient methodology to sell wholesale dark fiber, which it contrasts with the market structure for managed services. It also argues that there is a market for a connected network, based on dark fiber, which can deliver much higher capacity using virtual user paths at much lower cost.
Where the Czech Republic now appears as a mature market for dark fiber, the report identifies new market growth in the central and eastern Europe region, and identifies Russia as a potential opportunity given the imminent restructuring that is due to occur.
BroadGroup is based in London, England. For more information visit www.broad-group.com.