KMI: Long-haul fiber demand to begin slow rise in 2004

Sept. 4, 2001
September 4, 2001 According to a recent KMI report, fiber deployment will slow significantly over the next two to three years.

September 4, 2001 According to the recent KMI ( report entitled "Fiberoptic Networks of Long-Distance Carriers in North America: Market Developments and Forecast," fiber deployment will slow significantly over the next two to three years. The report is an update of a November 1999 report that forecast a downturn in the United States long-distance fiber and cable market starting in 2001.

As a result of the slowdown, industry consolidation is likely for the next two years, KMI says. Carriers that survive the downturn in relatively good health will be in a strong position to prosper from a coming broadband boom, the company continues. More end-users will move away from dial-up modems and put more traffic on the Internet backbone, thereby causing the impending broadband boom.

At the end of 2000, North American carriers had deployed 672,000 route-kilometers of fiber-optic cable in long-haul networks. At an average count of 52 fibers per cable, nearly 35 million kilometers of fiber have been deployed. That is five times the amount from four years ago. After reaching a peak of 140,000 route-km in 1999, annual deployment of cable is expected to fall back to just under 35,000 route-km by 2003. With increasingly higher fiber counts cushioning the decline in terms of fiber-km, annual deployment of fiber drops from a peak of just over 10.8 million fiber-km in 2000 to about 7 million fiber-km in 2003.

Even after 2003, when friendlier capital markets and a resurging bandwidth demand will lead to positive growth in annual long-haul deployment, the annual levels will still be below those reached in the peak years of 1999 and 2000.

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