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Market Feasibility Report-OfC

The document provides a market feasibility report for optical fibre cables (OFC) in India. It describes the OFC industry and current market analysis, noting strong demand growth driven by digital initiatives and 5G adoption. India's OFC market is projected to grow at 17% annually through 2023. The report also outlines key competitors, anticipated future drivers including telecom operators and broadband providers, potential buyers, and sales projections of over INR 7.5 Cr in the first year of production.

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Shashank Saxena
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273 views11 pages

Market Feasibility Report-OfC

The document provides a market feasibility report for optical fibre cables (OFC) in India. It describes the OFC industry and current market analysis, noting strong demand growth driven by digital initiatives and 5G adoption. India's OFC market is projected to grow at 17% annually through 2023. The report also outlines key competitors, anticipated future drivers including telecom operators and broadband providers, potential buyers, and sales projections of over INR 7.5 Cr in the first year of production.

Uploaded by

Shashank Saxena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Orient Cables India Pvt.

Ltd
Email: [email protected]
Website: www.orientcables.in

Market Feasibility Report-


Optical Fibre Cables (OFC)

Vipul Nagpal
1
CONTENTS

Description of Industry ............................................................................................... 2


Current Market Analysis ............................................................................................. 3
Competition................................................................................................................ 6
Anticipated Future Market Potential .......................................................................... 7
Potential Buyers ......................................................................................................... 9
Sales Projections ....................................................................................................... 10
Description of 2

Industry

A continuous upsurge in data services has created significant demand for optic fibre
cable (OFC) networks, both on the last mile and backhaul fronts.

As the telecom sector moves towards 5G technology, and the government works
towards realization of the Digital India, Smart Cities and Bharat Net targets, the OFC
industry is set to witness much higher demand.

OFC will be essential to support high bandwidth services such as video-on-demand,


virtual reality, IoT and artificial intelligence. Telecom operators have already increased
capex guidance for strengthening their OFC networks.

Organizations such as Indian Railways and Defense, and utilities in the power, oil & gas
and CGD spaces have also earmarked significant capex for enhancing their OFC
networks. Growing digitization of cable TV networks will further add to OFC demand by
multiple-system operators.
Current Market 3

Analysis

The global demand for optical fiber cable


(OFC) in 2018 is estimated at 511 million
fkm, valued at USD 7.64 billion. It is
expected to register a CAGR of over 12.26
percent to USD 13.63 billion in 2023.
Growth in the telecom industry and
favorable government initiatives aimed at
developing network infrastructure across
regions continue to be key drivers.

India optical fiber cables (OFC) market is


projected to grow at a CAGR of 17%
through 2023. Growth in the market is
majorly expected to be backed by rising
investments in OFC network infrastructure
by the Indian government to increase
internet penetration across the country,
which is in line with the government’s
initiatives such as Smart Cities Vision and
Digital India.

Moreover, growing demand for OFC from


IT & telecom sector, rising number of
mobile devices, increasing adoption of
FTTH (Fiber to the Home) connectivity and
surging number of data centers is
anticipated to fuel optical fiber cables
market in India over the coming years.
Current Market 4

Analysis

Telecom is the largest consumer of OFC, contributing to more than 40 percent of the
total market value. The segment includes communication service providers and
network infrastructure vendors.

Communication service providers are consistent in adoption of high-speed network


infrastructure in order to offer enhanced internet services. Optical fiber networks
allow telecom network links to be established over longer distances with minimal
power loss. The telecom segment is anticipated to continue its dominance in the
application arena.

Below is the snapshot of Global OFC Consumption w.r.t. Technology advancement in


Telecom Sector. On the other hand we have depicted the Fibre Deployed to Population
Ratio of different countries to estimate where India stands in current scenario.
Current Market 5

Analysis

The Indian market for optical fiber cable in 2018 is estimated at 29 million fkm,
projected to grow at a CAGR of 17 percent through 2023. Growth in the market is
majorly expected to be backed by rising investments in OFC network infrastructure by
the Indian government to increase internet penetration across the country, which is in
line with the government’s initiatives such as Smart Cities Vision and Digital India.
Moreover, growing demand for OFC from IT and telecom sector, rising number of
mobile devices, increasing adoption of FTTH (fiber to the home) connectivity, and
surging number of data centers is anticipated to fuel optical fiber cables market in
India over the coming years.
6
Competition

Some of the major manufacturers in India are Sterlite Technologies Limited, Himachal
Futuristic Communications Ltd., Finolex Cables Limited, Aksh OptiFibre Limited,
Paramount Communications Limited, Vindhya Telelinks Limited, Birla Cables Limited,
UM Cables Limited, Uniflex Cables Limited, and West Coast Optilinks. Below is the
market share of major competitors in Indian OFC Market FY 2017-18.

Note: Financial data of UM Cables, Uniflex Cables and West Coast Optilinks is not available hence not
represented in market distribution.
Anticipated future 7

market potential

Anticipated Key Drivers of the OFC Market in India will be:


Telecom Operators:
Mobile data access has been the key driver of internet penetration and data
consumption. As telecom operators upgrade networks to increase data speeds and
capacity, they require higher proportion of the network to be connected via fiber. For
the primarily voice-focused 2G networks, only 2-4 percent towers were required to be
fiberized as bulk of the voice traffic could be carried on low-cost microwave backhaul.
Indian operators relied primarily on microwave backhaul as getting right of way (RoW)
in India has been difficult and economics for fiber network for voice is unfavorable.
But, 3G network requires 15–18 percent of the sites to be fiberized, while 4G requires
65–75 percent of the network to be fiberized. Advent of 5G will require not only 100
percent of the network to be fiberized, but also significant densification of the network
and fiberized front haul investments to support the cloud radio access network (C-
RAN) architecture.

Thereon, we expect telecom operators to increase investment toward fiberization of


networks to augment data capacity to meet future demand. In comparison, China has
been deploying 13.7x more OFC per annum due to higher penetration of broadband
subscribers. However, we expect India’s fiber rollout to increase significantly as the
government continues to invest in building networks to bridge the digital divide and
strengthen the country’s defense networks. Mobile operators are investing in
improving backhaul to cater to burgeoning data demand.

Broadband Service Providers:


Broadband service providers aggressively expand fiber installations to cater to high-
speed data by using FTTH/FTTB. While the country has already embarked on its
ambitious BharatNet initiative, the world’s largest rural broadband connectivity project
to connect 600,000 villages, the Department of Telecommunications has introduced
another ambitious plan in its new draft national telecom policy. The draft envisages
providing wireline broadband access to 50 percent households, deploying 10 million
8

Wi-Fi hotspots and attracting investment of USD 100 bn by 2022. It also aims to
provide universal broadband coverage at 50 Mbps to every citizen, 1 Gbps to gram
panchayats and 100 Mbps to key development institutions, along with fabrication of 60
percent base stations, compared to less than one-fourth towers that are currently
connected to fiber, to prepare for 4G/5G technologies. Besides, there will be significant
investments from the telecom players to improve connectivity.

Inorganic Expansion:
The market in Asia-Pacific is highly fragmented in nature due to presence of large
number of regional as well as international players. These players are adopting several
strategies, such as new product launches and mergers and acquisitions in order to
sustain their presence in competitive environment. Amongst these, merger and
acquisitions form among the key strategies as they allow the companies to expand
their product portfolio and geographic reach, thereby gaining exposure to larger
consumer base.
9
Potential Buyers

Based on anticipation of future potential, potential buyers can be categorized as:


- Telecom Operators
- Broadband Service Providers
- Indian Government (BSNL, Indian Railways, Defense, Rail Tel, Bharat Net)
- Smart City Projects
- Metro Rail Corporations
- Highway Authorities
- Oil and Gas Companies (IOCL, ONGC, BPCL, GAIL)
- Regional Internet Service Providers
- Electronic Surveillance Solution Integrators
- CATV Operators
- Retail Distributers
10
Sales Projections

Sales projections are defined based on key components of the market analysis viz.
1- CAGR of 17% up to 2023
2- Increased market size due to advancement in Telecom from 4G to 5G
3- New markets like Smart City and Metro Projects
4- Increased market size of Broadband Service providers

Starting with 1 set of machines and expecting production to start in July-18, sales of 1st
year i.e. 2018-19 (9 months) is projected to be INR 7.5 Cr. Subsequent projections are
depicted in graph below:

Sales Projection in INR (Cr.)


80 75

60
42
40
18.3
20 12.5

0
2019-20 2020-21 2021-22 2022-23
Sales in Cr.

Above projections are made with the major business derivatives like:
1- Expansion of machinery in year 2020 and 2021
2- Type Approvals on Products in year 2020 and 2021
3- Opening up new market segments like FTTH, Indoor Cables, Mini and Micro
Cables in Year 2021 and 2022.
4- Focusing on Exports year 2022 onwards.

xxx---END OF REPORT---xxx

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