C114 News on December 14th (Shuiyi) It has been more than three months since China Telecom released the prequalification of the 2020 outdoor optical cable centralized procurement project. Just when we are still doubting whether the centralized procurement will continue as usual, 2020 will end. Previously, China Telecom announced the winning bidders for the centralized procurement project. Twenty-two manufacturers including Zhongtian, Fortis, YOFC, Hengtong, and Fiberhome won the bid, which can be said to be "even rain and dew".

When we see the bidding quotations of various manufacturers, we will doubt whether the unit price of optical fiber has dropped again? However, according to people familiar with the matter, the scale of this centralized procurement has been slightly adjusted, from 75 million core kilometers announced in the previous prequalification to 45.5 million core kilometers. Overall estimates, the unit price is higher than the price of China Mobile's ordinary optical cable centralized procurement this year.

A healthy industrial environment to be established

It is not clear why China Telecom adjusted the scale of centralized procurement, after all, it reduced the scale by nearly 40%. However, the rebound in prices has also given confidence to the industry chain and laid the foundation for the optical fiber and cable industry to return to a healthy industrial environment. China Telecom has always been committed to promoting the healthy development of the industry chain.

As the infrastructure to carry 5G network, fiber optic cable is the most indispensable part of 5G. Therefore, it is even more necessary for the industry chain to create a good industrial competition environment to ensure the high quality of the industry. network to support. In addition, it is equally important for the fiber optic cable industry, which is in a slow recovery cycle.

With the acceleration of "new infrastructure" such as 5G, big data centers, and artificial intelligence, the demand for a new round of fiber optic cables is real. Some research institutions pointed out that the supply-side capacity will continue to be cleared during the fall in optical fiber prices this year, and the relationship between supply and demand will gradually improve in the future. At this time, if a good industrial environment can be established, it will promote the healthy development of my country's communication industry, and also bring positive benefits to the optical fiber and cable industry.

CRU also pointed out that although the demand related to FTTx continues to weaken, China is required to speed up the construction of new infrastructure such as 5G and big data centers at the policy level, and the three major domestic operators have also significantly increased 5G-related capital expenditures, all of which are fiber optic cables. Growth in demand provides further upside.

At the same time, CRU expects that by 2021, the epidemic will be brought under control, the global economy will return to normal, operators' fixed network and 5G construction will be on track, and the global demand for optical fibers and cables is expected to increase by 7%. At the same time, driven by the ubiquitous optical fiber network, the demand for optical fiber and cable will maintain a relatively stable growth in the next few years. This also means that with the growth of demand and the gradual recovery of prices, the optical fiber and cable industry may usher in a new round of development.

Manufacturers need to firmly open up new tracks

Although the slight increase in price is a positive signal for manufacturers, the price of optical fiber cables at this stage is still low and will remain low in the short term, which is a big challenge for manufacturers' profits Therefore, manufacturers need to carry out a new strategic layout to improve quality and efficiency.

In recent years, in the face of falling prices, optical fiber and cable manufacturers are also undergoing self-transformation. While doing a good job in traditional optical fiber and cable business, they are also developing towards high-value business. On the one hand, it is to continuously carry out product innovation, continuously improve R&D capabilities, improve processes, and reduce costs, such as G.654.E, special optical fibers, etc.; on the other hand, to expand fields, such as participating in 5G fronthaul competition. , participate in it in the form of self-research or mergers and acquisitions, and gain a good share in the centralized procurement of optical modules at the group and provincial company levels.

In addition, 5G opens the era of the Internet of Everything. Optical fiber and cable manufacturers are also actively developing vertical industry markets, giving full play to the advantages of self-produced products, providing end-to-end network solutions, and enabling the digital transformation of various industries. Accelerate the process of industrial digitalization and achieve cost reduction and efficiency improvement.

2020 is an extraordinary year. Under the influence of the new crown epidemic, it has brought a profound impact on the entire industry. Optical fiber and cable manufacturers have experienced the "floor price" winter this year, and also experienced this "recovery" at the end of the year. I believe that in the future, with the recovery of the industry and related diversified layouts, these optical communication manufacturers will have unlimited imagination space.