New networks lack fibre

Optical fibre manufacturers boosting investment to make up for capacity shortfall

Global telecommunications operators are facing delays in updating their networks ahead of liberalisation of the European industry because of a worldwide shortage of optical fibre.

There is a 10% shortfall in worldwide supplies of fibre as the industry pays the price for the reluctance by manufacturers to invest in extra capacity during the recession.

Most of the affected network operators are concentrated in Europe, where public telecoms operators (PTOs) are preparing for liberalisation of the market in 1998.

The Dutch PTT is believed to have delayed the installation of optical fibre cable in a multi-million dollar upgrade in the Netherlands because of shortages.

Siemens, which has a joint venture optical fibre factory Neustadt, with US firm Corning, confirms the problems. `We usually tell the customers installation will take longer. We ran into these problems in 1995, and we just could not put in the extra capacity,’ said a spokesman.

Siemens has joined other manufacturers in spending tens of millions of pounds to double its capacity. BICC and Corning, the world’s largest manufacturer of optical fibre, are also expanding their factories to cope with demand.

BICC’s Deeside factory, a partnership with Corning, has seen a £25m expansion to increase productivity by 50% and is considering further expansion.

Corning is investing £150m in its existing plant at Wilmington, North Carolina, and recently announced the construction of a second factory there in Concord, requiring a similar investment.

Demand is coming from homegrown telecom companies which are rapidly updating their networks to compete head on with incoming rivals that have more advanced networks, and the technologically advanced PTOs such as BT, which are also adding more optical fibres to their existing networks.

`Fibre networks are becoming a lot more fibre rich,’ said BICC. `We’re seeing 96 fibres in a cable instead of 24.’ Fibre is fast taking over from copper by branching out from the trunk network and moving closer to the user.

Bottlenecks in supply are being blamed on PTOs and cable tv companies for placing unrealistic expectations on suppliers: `The companies might be purchasing for several projects at a time, and expect to install systems in a matter of months,’ said a BICC spokesman.

Some firms often expect to change their requirements with very little notice to their suppliers.

Factories in Britain have been particularly successful because they had a head start with liberalisation of the UK telecoms industry. Competitive pressures have rationalised the cablemaking industry, and pushed prices down.

Optical fibre exports from the UK grew by 41% in 1994, the last available official figures, compared with a 19% growth in imports.

The most recent export sales figure for 1994 was £43m, compared with £28m for imports. Export sales are successful partly due to fibre companies offering their business as full turnkey projects, a factor that forms 30% of the overall business.

By Melanie Tringham