Optical Communication Industry Faces Multiple Challenges
With the continuous expansion of 3G user scale, intensifying competition in broadband services, and the ongoing advancement of Triple Play, the three major domestic telecom operators have accelerated the pace of optical network city construction. In addition, the national-level "Broadband China" strategy is also about to be launched, which will further accelerate the broadband deployment process. These are all opportunities for faster and greater development of China's optical communication technology.
Huge demand drives market development. At present, China has become the world's most important optical fiber and cable market and the world's largest manufacturer of optical fiber and cable. It is understood that China currently holds a 20%–25% share of the global optical component market. In the global optical fiber and cable ranking of the "2010–2011 Top 10 Most Competitive Enterprises in the Global Optical Communication Industry," 3 of the top 10 enterprises are Chinese.
On the other side of opportunity often lies challenge, and China's optical communication industry is also facing numerous tests.
Low prices and thin margins are gradually shrinking the living space of domestic optical component enterprises. Some experts have noted that although market demand for optical components is strong, the risks of capacity expansion and oversupply are also significant. Due to expanding market demand, optical component prices have been declining continuously. It is understood that the price of fiber splitters has dropped by 40% compared to 2008. In addition, operators' excessive emphasis on price in centralized procurement has led manufacturers to continuously lower their quotes. With small profit margins, manufacturers' living space will gradually shrink. The entire broadband industry environment urgently needs further optimization by operators and communication equipment vendors.
From an international perspective, there remains a considerable gap between China's key optical component technologies and those of foreign companies. High-end critical chip technologies are in the hands of foreign companies, which severely constrains domestic production of high-end components. Increasing investment in high-end R&D and mastering key core technologies are the top priorities for the Chinese government and the optical communication industry.