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article imageOp-Ed: Fiber optics firms see gains from growth in data demand

By Elizabeth Brown     May 20, 2015 in Technology
Following the dotcom crash, the fiber optics industry struggled with oversupply. But recent increases in demand for data and growing requirements for faster bandwidth are resulting in a boon for the industry.
Growth in Data
A growing component of Internet traffic involves bandwidth-hogging video and multimedia. Thus, telecom and cable operators are engaging in an arms race to have the best bandwidth at ultra-fast speeds to satisfy a growing appetite by customers to have instant data.
"The market for corporate customers' voice and data services has been estimated by analysts to be worth anywhere from $57 billion to $100 billion in revenue per year," according to Business Insider.
Fiber optic lines bring broadband Internet to homes and mobile devices. The technology can reach longer distances and enable data rates of 100 megabits per second to 1 gigabit per second. But the increased usage of Web video, such as YouTube, means households are using fiber optics as a way to watch video content which, through television, was traditionally conveyed through copper wiring or satellite dish. The arrival of more devices connecting to the Internet, such as smart appliances and mobile gadgets, means more consumers want reliable transmission of large amounts of content.
High-Speed Connections
Whereas fast residential connections can have a download speed of 105 megabits per second, telecoms are experimenting with more rapid features. In Illinois, Comcast recently introduced a program in which households can get 2-gigabit-per-second upload and download speeds.
Operators, such as Los Angeles-based Wilcon, are growing their fiber networks to keep up with growing demand from enterprise, media, government, education and healthcare industries. As an example, Wilcon enables companies to power their digital bandwidth requirements with their dark fiber network by providing access to high speed Internet carriers located in data centers throughout its Southern California network. The dark fiber lines deliver ultra-broadband performance and cost efficiencies through Wilcon's more than 3,000 route miles in Southern California.
In the U.S., fiber optic cable manufacturers grew 9.2 percent annually between 2009 to 2014, according to IBISWorld. And analysts expect the demand for high-speed Internet to accelerate over the next five years.
Thus, the industry could see plenty of capital infusion from investors, as well as, potential consolidation. In Alaska, a New York-based private equity firm is investing hundreds of millions of dollars in a trans-Arctic cable that proposes to connect Europe and Asia through fiber cables beneath the ice.
Internationally, subscriptions to the high-speed networking service are growing at double-digit pace, according to the Organization for Economic Cooperation and Development (OECD), which monitors economic trends in developed countries and regions. Some countries are seeing astronomical growth in new connections each year. Mexico saw a 290 percent increase in fiber connections from 2012 to 2013. The UK grew at 172 percent with Chile at 171 percent and Australia at 121 percent.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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