The key carrier of information and communication-the latest industry development of optical fiber and cable industry.

01 Fiber Optic Cable Industry Overview
Optical fiber is a shorthand for optical fiber, a medium for transmitting light beams, consisting of a core layer, a cladding layer and a coating layer. Optical fiber has the advantages of large communication capacity, long relay distance, good confidentiality, strong adaptability and other significant characteristics, so it is widely used in the communication industry and is the main component of the production of optical cable.
As an important part of the information and communication industry, the optical fiber and cable industry has always maintained a steady pace of development. In recent years, driven by the large-scale demand of China's communication construction, a complete industrial chain from optical fiber preform, optical fiber, optical cable to optical network products has been constructed. China has emerged as the leader in the global fiber optic cable market and is firmly at the top of the global fiber optic cable manufacturing. Despite the influence of external factors in recent years, the overall operation of the optical fiber and cable industry is still good, and the market demand continues to be stable.
02 Development Status of Optical Fiber and Cable
With the development of China's overall network construction and digital economy, the construction of 5G network and the upgrading of gigabit optical fiber drive the market demand continued to increase, the total length of optical cable lines increased steadily. According to market research firm CRU forecasts, from 2021 to 2026, China's fiber optic cable demand will maintain a compound annual growth rate of 2.9. According to statistics, as of the end of September 2023, the total length of the national optical cable line reached 63.1 million kilometers, a net increase of 3.517 million kilometers over the end of last year. Analysts at the China Business Industry Research Institute predict that the total length of optical cable lines across the country will reach 64.58 million kilometers in 2023 and is expected to increase to 67.35 million kilometers in 2024.
In terms of China's fiber optic cable production and fiber optic cable construction length scale, the early benefit from the continuous growth of industry demand and capacity expansion, the overall domestic fiber optic cable production showed an upward trend, China's fiber optic cable production from 0.227 billion core kilometers in 2013 to 0.342 billion core kilometers in 2017. In 2018-2019, industry production continued to decline due to the decline in operator capital expenditure, and since 2020, driven by 5G investment and FTTR, fiber optic cable production has resumed growth, with fiber optic cable production of 0.322 billion, 0.346 billion and 0.323 billion core kilometers in 2021, 2022 and 2023, respectively.
China's network infrastructure construction accelerated. The construction of 5G network is progressing steadily, and the network coverage capacity continues to increase. In China, the penetration rate of optical fiber is close to saturation, and the overall broadband access to fixed Internet is developing at a high speed. However, as of 2021, only 6.5 of the users with 1,000Mbps and above will account for, and there is still much room for upgrading optical fiber. Moreover, the state is actively promoting the construction of optical fiber communication network. Several "14th Five-Year Plan" and "Double Gigabit" action plans have clearly proposed the full deployment of Gigabit optical fiber network.
03 Fiber optic cable industry trends
By the end of 2023, China's three basic telecommunications enterprises had 0.636 billion fixed Internet broadband access users, of which 0.163 billion had access rates of 1,000Mbps and above, accounting for 25.7 percent in 2023 from 6.5 percent in 2021. China's "double gigabit" network construction has been substantially improved in the past three years, but there is still room for further penetration and development.
In the context of the continuous advancement of dual gigabit network construction and the continuous deepening of the integration of the digital economy and the real economy, it is expected that the scale of my country's optical fiber and cable market is expected to continue to grow and reach 540.8 billion billion yuan in 2025. Overseas, the intensive formulation of optical fiber access plans around the world, strengthening the coverage and increasing the connection rate to gigabit scale is an important development direction of network construction in various countries in the future. The demand for home broadband market continues to be strong, which continues to promote the optical fiber transformation of global broadband networks and the extension of optical fiber access to home users in various countries.
In the future, China's fiber optic cable industry will usher in the transformation and upgrading and 5G, data center applications gradually landing, which will effectively support market demand. Since the practical application of optical fiber communication, the construction of communication information system in the global scope has been continuously promoted, and about 90% of the information is transmitted through optical fiber and cable.
04 The latest state of industry competition pattern and downstream movement
In terms of the competitive landscape, the major manufacturers in the fiber optic cable industry have experienced full competition in the construction of multiple communication cycles. In 2023, the world's top ten manufacturers will occupy 88.2 percent of the market share of the fiber optic cable market. Among them, Chinese manufacturers Changfei Fiber, Zhongtian Technology, Hengtong Optoelectronics, Fiberhome Communications, Fortis Information accounted for 11.3, 7.9, 8.9, 7.7 and 6.1 percent, respectively, Changfei Fiber and Hengtong ranked second and fourth in the world in terms of market share, strong market competitiveness.
As a weather vane in the fiber optic cable market, China Mobile's fiber optic cable procurement volume is the largest. In the four tenders since 2018, China Mobile has purchased nearly 0.5 billion core kilometers of ordinary cables. In September 2023, China Mobile launched a centralized procurement of G.654E optical fiber and cable products, purchasing a total of 8,463 pico-kilometers of G.654E optical fiber and cable, equivalent to 1.2279 million core kilometers. Changfei Optical Fiber, Zhongtian Technology, Hengtong Optoelectronics and FiberHome Communications accounted for 40%, 23%, 20% and 17% of the standard package respectively. Compared with the 2022 batch scale, the collection increased by 6,329 leather kilometers, equivalent to 895500 core kilometers. The purchase price excluding tax increased from about 90.7733 million yuan to about 256.8112 million yuan. The fiber optic cable industry is expected to continue to benefit from 400G network construction.
China Unicom and China Telecom also have a large number of procurement needs: China Telecom will collect about 50 million core kilometers of outdoor optical cables in 2023, and China Unicom will collect 1.44 million core kilometers of optical cables in 2022. In addition to the operator market, non-operator market demand is also relatively abundant. State Grid plans to invest 579.5 billion yuan in 2022, an increase of 44 percent over 2021, while China Southern Power Grid plans to invest 125 billion yuan in fixed assets, an increase of 26 percent over the same period last year. During the 14th Five-Year Plan period, the State Grid and China Southern Power Grid plan to invest 2.23 trillion yuan and 670 billion yuan respectively. Overseas markets are also showing positive trends.
Since the first half of the year, the export volume of light rods, optical fibers and optical cables has increased significantly compared with the same period of the previous two years. According to customs data, the cumulative export volume of optical cables from January to June 2023 was about 11.0088 million kilometers, an increase of 101 percent over the same period last year. To sum up, under the promotion of China's policy, especially under the stimulation of 5G and gigabit optical network construction, the supply and demand relationship of optical fiber and cable is expected to maintain a stable situation. In addition, the non-operator market and overseas markets have shown great growth potential, which is expected to inject new vitality into the optical fiber and cable industry. Combining these factors, we are cautiously optimistic about the development prospects of the optical fiber and cable industry.