The manufacturing of optical fibre cable (OFC) is at the forefront of modern telecommunications infrastructure, facilitating the global connectivity essential for today’s digital age. As demand for high-speed internet and advanced communication networks continues to surge worldwide, the production of OFC plays a pivotal role in meeting these needs. India, in particular, is becoming one of the largest manufacturers of various types of cables, excluding submarine cables.

Market landscape

In 2023, the demand for OFC in India stood at approximately 31 million fibre km (fkm), significantly lower than its global counterparts, with North America requiring 81 million fkm, Europe 76 million fkm and China demanding a substantial 319 million fkm. Currently, India needs around 2 fkm of OFC per person, translating into a total requirement of 2.8 billion fkm. However, only less than 10 per cent of the essential OFC has been installed, even after accounting for the removal of dead or poor-quality fibre.

Challenges

India’s manufacturing landscape is gradually evolving. However, identifying the appropriate price point for OFC remains crucial. Additionally, addressing fibre cuts is imperative in OFC design as each kilometer of fibre typically experiences one cut annually, which highlights the need for a robust topology. The topology should be meticulously mapped to ensure network reliability and efficiency.

The industry faces several other challenges. On the demand side, market entry barriers prevent the growth of the industry. Furthermore, OFC production capacity is growing faster than demand, compounded by the slow roll-out of 5G technology. On the supply side, lower capacity utilisation, rising input costs, geopolitical issues leading to reduced investments, supply chain disruptions and increased inventory levels present significant obstacles.

There is urgent need for extensive OFC deployment to support India’s digital infrastructure. However, the insufficient financial resources of operators limit growth, preventing the installation of the required OFC. Overcoming these barriers is crucial for India to enhance its connectivity and align with global standards, thereby supporting its digital transformation and economic growth.

Market trends and growth drivers

In 2024, the trend of reduced investment in OFC network development by key players is likely to persist. However, India’s OFC market is poised for substantial growth, driven by multiple factors. This includes the recent announcement of the BharatNet Phase III tender by Bharat Sanchar Nigam Limited. This tender, valued at Rs 650 billion, is expected to significantly expand the country’s digital infrastructure. The accelerated roll-out of 5G and the ambitious Bharat 6G vision are expected to further propel market expansion.

Meanwhile, India’s OFC and accessories market is projected to reach $1.66 billion by 2026 at a compound annual growth rate of 17.2 per cent. The fiberisation of towers is also expected to increase from the current 40 per cent to 75 per cent, significantly enhancing connectivity. Furthermore, initiatives by the National Highways Authority of India, development of high-speed railway tracks and modernisation of signalling systems will contribute to the growth of the OFC market in India.

Measures needed

Several significant actions are needed in the industry, including ramping up 5G network and last-mile development, streamlining right of way permissions and improving interdepartmental coordination. Further, standardising deployment practices to ensure longer life and lower total cost of ownership is essential. Establishing standards for OFC and other passive components is also crucial.

Finally, there is a need to create a more skilled workforce adept in various deployment techniques, including underground, aerial and last-mile installations. These steps will collectively enhance the efficiency and effectiveness of the industry’s growth and infrastructure development.

The way forward

Going ahead, ensuring the longevity of the deployed fibre is crucial. Adopting a “dig-once” policy will be particularly beneficial for India’s OFC manufacturing industry, minimising repeated disruptions and promoting efficient infrastructure deployment.

The government must also address the demand-supply gap among different stakeholders within the OFC manufacturing sector. For example, preform manufacturers struggle to sell their products domestically, while organisations that draw fibre often resort to importing preform to meet their needs.

Another significant step forward for the OFC manufacturing industry is the introduction of a dedicated production-linked incentive (PLI) scheme. A PLI scheme valued at approximately Rs 2.5 billion is currently in development and is expected to be launched soon. By addressing the challenges and implementing supportive policies, India can strengthen its position in the global OFC market.

Based on a presentation by Pramod Srivastava, Chief Executive Officer, West Coast Optilinks; and remarks by Sandeep Aggarwal, Managing Director, Paramount Cables