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Analysis of the fiber optic cable market in India

Analysis of the fiber optic cable market in India Analysis of the fiber optic cable market in India
Release date 13.09.2021
Number of pages 67
Formats DOCX, PDF
Cost 45000 ₹

The relevance of research

A fiber optic cable (also fiber optic or optical fiber cable) is a cable based on fiber light guides designed to transmit optical signals in communication lines, in the form of photons (light), at a speed lower than the speed of light due to the non-linearity of movement


Purpose of the study

Analysis of the state of the market for fiber optic cables, assessment of the market size, analysis of competitors, as well as identification of factors affecting the market for fiber optic cables


Content

Part 1. Overview of the Indian fiber optic cable market

1.1. Main characteristics of the market
1.2. Dynamics of the market volume of fiber optic cables 2016-2020 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Life cycle stage of the fiber optic cable market
1.5. Competition from substitute products

Part 2: Competitive Analysis in the Fiber Optic Cable Market

2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players

Part 3. Analysis of the production of fiber optic cables

3.1. Volume and dynamics of domestic production of fiber optic cables
3.2. Share of exports in the production of fiber optic cables
3.3. Segmentation of fiber optic cables production by regions:
3.3.1. Production by Union Territories
3.3.2. Production by states of India

Part 4. Analysis of foreign trade deliveries of fiber optic cables

4.1. Volume and dynamics of imports of fiber optic cables
4.2. Structure of imports by countries
4.3. The volume and dynamics of exports of fiber-optic cables
4.4. Structure of exports by countries

Part 5: Fiber Consumption Analysis

5.1. Dynamics of the volume of consumption of fiber-optic cables
5.2. Analysis of the results of tenders for the purchase

Part 6. Price Analysis

6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India

Part 7. Assessment of factors of investment attractiveness of the market

Part 8. Forecast for the development of the fiber optic cable market until 2025

Part 9. Recommendations and conclusions


Research excerpt

Part 1. Overview of the Indian fiber optic cable market

1.1. Main characteristics of the market

Consider the characteristics and features of the Indian fiber optic cable market.  
The fiber optic cable market in this study refers to the totality of enterprises that produce and sell fiber optic cables, form the market supply, the number of users of the above products and form market demand, as well as the relationship that arises between sellers and consumers of fiber optic cables in India .

A fiber optic cable (also fiber optic or optical fiber cable) is a cable based on fiber light guides designed to transmit optical signals in communication lines, in the form of photons (light), at a speed lower than the speed of light due to the non-linearity of movement.

A fiber optic cable consists of the following elements:
carrying cable, rod made of fiberglass or metal coated with a polyethylene sheath. Serves for centering the tubes - modules and stiffening the cable, clamped under the screw to fix the cable in the coupling / cross;
two-layer glass or plastic fibers, possibly coated with one or two layers of varnish. The lacquer layer protects the fibers from damage and serves for color marking of the fibers (transparent or colored);
plastic tubes containing threads - light guides and filled with a hydrophobic gel. The number of tubes varies from 1 or more, the number of fibers in the tube is from 4 to 12, the total number of fibers in the cable is from 4 to 288 (often 32, 48, 64). To save the overall dimensions of the cable with a small number of fibers, black plugs can be inserted instead of tubes;
a film braiding the tubes, pulled together with threads and moistened with a hydrophobic gel. It has damping properties and is designed to reduce friction inside the cable, provide additional protection against moisture, retain hydrophobic liquid in the space between modules, etc.;
a layer of a thin inner shell made of polyethylene, designed for additional protection against moisture (may be absent);
a layer of Kevlar threads or armor. Armor - a rectangular bar or round wires made of steel (imported cable), nail iron (domestic cable) or fiberglass (same as the central strength element). Kevlar is lightweight and has a tensile strength of 6-9 kN. The purpose of Kevlar is to act as a cable in places where pickups are unacceptable, for example, along railway tracks (contact wire, voltage up to 27,5 kV); perception of wind load. The purpose of the armor is to protect the cable laid in the ground without protection in the form of a plastic pipe, cable duct, or others;
a layer, which is a polyethylene film and a certain amount of hydrophobic gel (may be absent). Designed for additional moisture protection;
layer, which is a thick and soft shell of polyethylene. Designed to protect the inner layers from environmental influences.

The classification of fiber optic cables includes:

Concerning bearing loads and purpose:
The backbone fiber optic cable is used for networks laid over long distances, has a large bandwidth of the information flow, due to the use of single-mode optical fiber with a shifted dispersion. The modular design of the optical fiber with the use of additional high-tech elements provides the possibility of laying in various types of soil.

City optical cables are used for communication systems of objects within the city, region, local area. The length of such communication networks can reach 100 km. The use of gradient fibers in the wire structure makes it possible to maintain multichannel communication at several wavelengths.
Object fiber-optic cables provide high-speed connection within the network of institutions, cable and telephone communication systems, in mobile objects of information systems.
Fiber optic mounting products are applied to the assembly and commissioning of equipment.

Location of communication networks:
underground networks - can pass directly in the ground, highways, through cable channels or tunnels of other types of communications;
overhead communication lines - carried out using existing supports and structures for power lines, radio communications, lighting networks or transport lines.
The fiber optic cable market in India is characterized by the following features:
...

The Indian production of fiber-optic cable is almost completely dependent on imported optical fiber. 
...

1.2. Dynamics of the market volume of fiber optic cables 2016-2020 Potential market capacity

Consider the volume dynamics of the Indian fiber optic cable market. According to GidMarket's calculations based on data from Rosstat and the Federal Customs Service, the volume of the fiber optic cable market in India in 2020 amounted to ... thousand km, having increased by ...% compared to 2019. 
...

Unfortunately, official statistics do not contain data on the distribution of revenues of enterprises producing fiber-optic cables by union territories, therefore, the calculation of the shares of the Union territories was made according to the general code OKVED 2 (27.3) - Production of cables and fittings.

Diagram 3. Revenue (net) from the sale of fiber-optic cables in the union territories for 2016 - 2020,%

In general, the distribution of shares between federal districts in terms of sales proceeds is fairly stable. 
...

1.3. Assessment of factors affecting the market

Below are the main factors influencing the fiber optic cable market and, accordingly, the demand and income of market operators. 

Economic

Dynamics of India's GDP
The dynamics of India's GDP is an indicator of the country's economic development. GDP has an impact on the development of all sectors and markets of the economy, as well as the level of effective demand of the population. 
...
Dollar rate
The impact of exchange rates on the Indian fiber optic cable market is twofold. On the one hand (positive impact), the devaluation of the national currency leads to an increase in the cost of imported cable, as well as to a redistribution of demand towards domestic-made optical cable due to the more attractive price of the latter. On the other hand (negative impact), the devaluation of the national currency leads to an increase in the cost of the main imported raw material - optical fiber, which ultimately affects the increase in the cost of fiber optic cables.
...

Industrial production in India
...
The need to replace the outdated FOCL infrastructure due to reaching the time threshold of its use (FOCL built more than 20 years ago). 
...

Social factors

Population of India 
...

Real money income of the population of India
During 2014-2018 The dynamics of real monetary incomes of the population of India was characterized by a negative direction, the incomes of the population were continuously falling. 
...

Consumer Confidence Index
...

Level of urbanization
The migration influx in large cities leads to an additional supply of labor, an increase in demand for various services and goods in large cities, including the provision of mobile communications, high-quality and affordable mobile and home Internet, which stimulates the development of the studied market in these cities. For the analyzed market - the positive influence of the factor.
...

Technological factors

A wide range of designs and macro-dimensions of fiber optic cable, marking
Modern technologies for the production of optical cables offer the consumer a wide choice of designs that meets all possible requirements for operating conditions. More than 50 types of cable are presented in the Indian market alone, and the number of brand sizes is in the thousands. Domestic manufacturers mark fiber optic cables according to the developed specifications. Therefore, the labeling varies from manufacturer to manufacturer. When marking, the following are indicated: core; protective armor; central and peripheral power elements; protective coating material; the structure of the arrangement and the number of fibers in the cable and their type; technical characteristics of the optical fiber (attenuation coefficient, chromatic dispersion, etc.).

In addition, fiber-optic cables are marked according to their scope - for laying in underground pipelines and collectors, with conventional armor made of corrugated tape or round wire, with reinforced armor protection, suspended self-supporting.
The presence of a wide choice of designs and macro-dimensions of a fiber-optic cable is a positive influence of the factor.

Development of technology caused by the coronavirus pandemic
The forced departure to a remote work format in connection with the coronavirus pandemic showed that communication networks experienced enormous loads during the period of self-isolation, and there is a need to maintain this ability to withstand similar loads. Moreover, the trend to transfer staff to remote work continues, which means that a really fast and well-protected Internet at home will be needed. This, in turn, will contribute to the modernization of the existing FOCL infrastructure, as well as increasing the requirements for fiber optic infrastructure when laying new lines using fiber optic cable with improved technical characteristics.

Political and legal factors

Licensing and other documents. In accordance with Article 12 of the Federal Law of May 04.05.2011, 99 N 18.02.2020-FZ (as amended on February 28, 2020) “On Licensing Certain Types of Activities” (as amended) dated March , , a list of types of activities for which a license is required . The production of fiber-optic cable is not included in this list, therefore, a license is not required to engage in this activity.
...

Legal framework in the field of production of fiber-optic cables. The industry has a developed legal framework. Defining documents include:
GOST R 52266-2020 Optical cables. General specifications.
GOST 18690 Cables, wires, cords and cable fittings. Marking, packaging, transportation and storage.
GOST 22483 (IEC 60228:2004) Conductive conductors for cables, wires and cords.
GOST 30546.1 General requirements for machines, instruments and other technical products and methods for calculating their complex structures in terms of seismic resistance.
GOST 30546.2 Seismic resistance tests of machines, instruments and other technical products.
GOST 31565 Cable products. fire safety requirements.
GOST IEC 60331-25 Flame testing of electrical and optical cables. Maintaining performance. Part 25. Testing and requirements for them. Optical cables.
...
Also, enterprises producing fiber-optic cables can produce them according to their own developed technical specifications (TU) with subsequent coordination with the Central Research Institute of Communications (FSUE TsNIIS)

State programs and projects influencing the development of the production of fiber-optic cables. These programs include:
The Federal Project to Eliminate the Digital Divide, which was launched in 2014. In accordance with this project, the latest data transmission networks will appear not only in cities with a population of one million and one hundred thousand, but also in rural areas with a population of 250–500 people, including in remote regions of our country. As a result of the implementation of this project, even those residents of India who now access the world wide web only via satellite should receive broadband Internet access.

National Program ""Digital Economy of India"". The passport of the national program was developed by the Ministry of Communications of India in pursuance of the Decree of the President of India dated May 7, 2018 No. 204 ""On the national goals and strategic objectives of India's development for the period up to 2024"" and includes six federal projects: “Regulatory regulation of the digital environment”, “Information infrastructure”, “Personnel for the digital economy”, “Information security”, “Digital technologies” and “Digital public administration”. The implementation period of the national program: from October 2018 to 2024 (inclusive). The key goals of the national program are the increase in internal costs for the development of the digital economy, the creation of a stable and secure information and telecommunications infrastructure for high-speed transmission, processing and storage of large amounts of data, accessible to all organizations and households, the use of predominantly domestic software by government agencies, local governments and organizations .
In 2015, the Ministry of Industry and Trade decided to include fiber in the import substitution program, which is used for the manufacture of optical cables. In the same year, a plant was launched in Mordovia

CJSC ""Optic fiber systems"", whose investor is OJSC ""Gazprombank"", OJSC ""Rosnano"" and the government of the Republic of Mordovia. Investments in it amounted to 2,7 billion Rs. Saransk production has become the first and only enterprise in India to date, producing optical fiber - a key component of fiber optic cables. The plant became one of the links in the import substitution program implemented in India and the first stage in the creation of a completely domestic fiber optic cable.

The instability of the political situation against the backdrop of developments on a global scale, anti-Indian sanctions, a change of government, amendments to the Constitution hinders investment processes. The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy. The main activities of the state and the strategic tasks at present are the development of new models of cooperation with the US and the EU and the approval of India in the world monetary system. Anti-India sanctions and the generally sharp deterioration in relations between Western countries and India largely determine India's foreign policy. Negative influence of the factor.

We combine all the factors discussed above in the form of a STEP analysis.

Table 2. STEP Analysis of Factors Affecting the Fiber Optic Cable Market

According to the results of the performed STEP-analysis, the factors of the macro environment in 2016-2020. had a more positive impact on the fiber optic cable market. Three of the groups of factors under consideration had a multi-vector influence on the development of the market. One group of factors had a unidirectional effect. 
...

1.4. Life cycle stage of the fiber optic cable market

The Indian fiber optic cable market is in a stage of renewed growth, which lies in the implementation of the program to bridge the digital divide and subsidize the construction of fiber optic lines in remote and rural areas, as well as the implementation of the National Digital Economy India program, the key projects of which are: building networks 5 -th generation of mobile communications, the creation of regional data centers and the improvement of the backbone infrastructure of domestic communications.
...

1.5. Competition from substitute products

Competition from substitute products, to some extent, is the use of copper cable, in the design of which copper conductors are used. At the same time, copper cables and connections show too much signal attenuation even over short distances, which reduces their competitive advantages in comparison with other types of cable products with comparable technical characteristics and applications. In addition, the advent and continued widespread use of optical cable, whose advantages include large bandwidth, extremely high speed and long transmission distances, excellent reliability and perfect security, has replaced copper in all aspects of transmission and reception of the network. 
...

Part 2: Competitive Analysis in the Fiber Optic Cable Market

2.1. Major players in the market 

The fiber optic cable market in India is characterized by a low level of concentration (large number of operators with low market shares, Herfindahl-Hirschman HHI < 1000 - low concentration market). 

The Indian market for fiber optic cables is represented, to a greater extent, by domestically produced products. The share of imported products in the studied market is insignificant. 
...

2.2. Market shares of the largest competitors

Let's determine the shares of the largest competitors in the fiber optic cable market in India. There are a large number of operators in the Indian fiber optic cable market, among which there are enterprises that produce not only fiber optic cables, but also other types of cable and wire products. The market is low-concentrated, the shares of individual market players are insignificant. 

As a basis for calculating the shares of the largest operators of the fiber-optic cable market, data were taken on revenue (net) from sales of enterprises to the total market volume in value terms. The source of data for determining the proceeds from the sales of enterprises was the financial statements presented in the Rosstat system. At the same time, for enterprises whose products include not only the production of fiber-optic cables, but also other types of cable and wire products (in particular, power cables, control cables, control cables, communication cables, etc.), adjustment taking into account the fact that the revenue from the sale of fiber-optic cables takes a different share depending on the types of cable and wire products produced, its product range. In this connection, there is an error, which is associated with the impossibility of accurately dividing the share of these operators between the sale of fiber-optic cables in the total income of the company.
...

2.3. Profiles of major players

Profiles of the main players with contact details, products manufactured within the studied market are presented in Table 4.
...

Part 3. Analysis of the production of fiber optic cables

3.1. Volume and dynamics of domestic production of fiber optic cables

Dynamics of volumes of domestic production of fiber-optic cables in 2016-2020 characterized by unevenness: there is both an increase and a decline in production. 
...

According to GidMarket, the total revenue of the TOP-5 largest manufacturers of fiber optic cables in 2020 amounted to ... mln Rs. 

Diagram 13. The dynamics of the total revenue of the largest manufacturers (TOP-5) of fiber optic cables in India, 2016-2020

3.2. Share of exports in the production of fiber optic cables

Dynamics of the share of exports in the production of fiber-optic cables in 2016-2020 has a jumpy character. 
...

3.3. Segmentation of fiber optic cables production by regions: 
...
3.3.1. Production by Union Territories

The production of fiber-optic cables in India in the context of federal districts is characterized by pronounced unevenness. 
...

Table 5. Dynamics of production of fiber-optic cables in India by union territories, 2016-2020, thousand km

3.3.2. Production by states of India

Unfortunately, official statistics do not contain data on the distribution of the production volume of enterprises producing fiber-optic cables by the states of India, therefore, the calculation of the shares of Indian states is based on the revenue of these enterprises according to the OKVED 2 (27.3) generalizing code - Production of cables and fittings.

Diagram 15 shows the states of India that have revenue shares from the sale of fiber optic cables of at least ...%. 

Part 4. Analysis of foreign trade deliveries of fiber optic cables

4.1. Volume and dynamics of imports of fiber optic cables

Carrying out this analysis is complicated by the fact that the data on the studied indicator in the Federal Customs Service are given only in the weight meter - tons. In this regard, the assessment of the volume of imports in physical terms (km) by GidMarket analysts was made by calculation - by converting kg into km, based on the average weight of 1,0 km of cable.
...

Moreover, domestic fiber optic cable manufacturers had a clear competitive advantage compared to Western factories, given the tough tender conditions for domestic supplies, the high refinancing rate and the availability of production capacity, which ultimately contributed to the growth of domestic production and exports. in 2016-2019 in kind.

Diagram 16. Volume and dynamics of imports of fiber-optic cables in physical terms, 2016-2020, thousand cubic meters

The dynamics of imports in monetary terms has a more even character, to a greater extent, characterized by an upward trend. 
...

4.2. Structure of imports by countries

The top 10 countries importing fiber optic cables in India in 2020 included ...
...

4.3. The volume and dynamics of exports of fiber-optic cables

Carrying out this analysis is complicated by the fact that the data on the studied indicator in the Federal Customs Service are given only in the weight meter - tons. In this regard, the assessment of the volume of exports in physical terms (km) by GidMarket analysts was made by calculation - by converting kg into km, based on the average weight of 1,0 km of cable.
...

4.4. Structure of exports by countries

At the end of 2020, Indian-made fiber optic cables were exported to more than 50 countries. 
...

Diagram 21. Structure of export of fiber-optic cables by countries, 2020, % 

Part 5: Fiber Consumption Analysis

5.1. Dynamics of the volume of consumption of fiber-optic cables

The per capita consumption of fiber optic cables was estimated by GidMarket on the basis of the ratio of the volume of the Indian market of fiber optic cables in real terms to the population of India. 
...

5.2. Analysis of the results of tenders for the purchase

We will analyze tenders for the purchase of fiber optic cables announced from 01.01.2020/31.12.2020/ to / / . The source for the analysis was Bicotender data, Roseltorg.
...
Analysis of information on competitive procurement of fiber-optic cable showed:
...

Part 6. Price Analysis 

6.1. Average producer prices by union territories

According to Rosstat data, five federal districts (North Caucasian Union Territories, Ural Union Territories, Far Eastern Union Territories, Siberian Union Territories, and Northwestern Union Territories) lack data on average producer prices. 
...

6.2. Average consumer prices by states in India

Taking into account that data on average consumer prices for fiber optic cables, both for India as a whole and in the context of federal districts and states in particular, are not available in the Rosstat system, the calculation of average consumer prices for the states of India was made by GidMarket analysts, based on the average prices of fiber optic cable suppliers presented in open sources (official websites). Data on average consumer prices for fiber optic cable were calculated for those states of India that have high shares in the structure of sales revenue (previously presented in diagram 15, paragraph 3.3.2 of this study).
...

Part 7. Assessment of factors of investment attractiveness of the market

The positive investment climate in the Indian fiber optic cable market dominates the negative. A comprehensive assessment of investment attractiveness factors is -1,05 points - a neutral investment climate.

The most significant negative factors. 
...
The most significant positive factors. 

Part 8. Forecast for the development of the fiber optic cable market until 2025

We will carry out a forecast of the development of the market for fiber optic cables based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
...
At the same time, the following factors are significant for the forecast of the volume of the market for fiber optic cables:
...

Part 9. Recommendations and conclusions

According to GidMarket's calculations based on data from Rosstat, FCS, the volume of the fiber optic cable market in India in 2020 amounted to ...
According to the results of the performed STEP-analysis, the factors of the macro environment in 2016-2020. had a more positive impact on the fiber optic cable market. 
...

From the point of view of investment attractiveness of the Indian fiber optic cable market, the positive factors of the investment climate dominate over the negative ones. A comprehensive assessment of investment attractiveness factors is -1,05 points - a neutral investment climate.
...
The following proposals can serve as recommendations for entering the market for new operators:
...

Continuous improvement in the performance of fiber optic cable, development of new cable designs in accordance with consumer demands and technological advances, ensuring a consistently high product quality, implementing a flexible partnership policy and creating effective producer-consumer and producer-supplier-consumer relationships will contribute to the successful operation operators in this market.


Diagrams

Diagram 1. The ratio of imported and domestic products in the market of fiber optic cables, 2016-2020, %
Diagram 2. Dynamics of the volume of the Indian market of fiber optic cables, 2016-2020, thousand km
Diagram 3. Revenue (net) from the sale of fiber-optic cables in the union territories for 2016 - 2020,% 
Diagram 4. Dynamics of India's GDP, 2012-2020, % to the corresponding period of the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2016-2020, Jan. 2021 Rs. for 1 US dollar
Diagram 6. Dynamics of industrial production in India, 2015-2020, % to the previous year
Diagram 7. Population dynamics in India, as of 01 Jan. 2012-2021, million people
Diagram 8. Dynamics of real money incomes of the population of India, 2012-2020, % to the corresponding period of the previous year
Diagram 9. Dynamics of the consumer confidence index, 2017-2020, quarterly, %
Figure 10. Life cycle stage of the fiber optic cable market
Chart 11. Shares of the largest competitors in the fiber optic cable market in India, 2020, %
Diagram 12. Dynamics of production volumes of fiber-optic cables in India for 2016 - 2020, thousand km
Chart 13. The dynamics of the total revenue of the largest manufacturers (TOP-5) of fiber optic cables in India, 2016-2020
Diagram 14. The share of exports in production for 2016–2020, %
Diagram 15. Structure of revenue (net) from the sale of fiber-optic cables by states of India in 2020, %
Diagram 16. Volume and dynamics of imports of fiber-optic cables in physical terms, 2016-2020, thousand km
Diagram 17. The volume and dynamics of imports of fiber-optic cables in monetary terms, 2016-2020, RUB million
Diagram 18. Dynamics of export of fiber-optic cables in physical terms, 2016-2020, thousand km
Diagram 19. Dynamics of export of fiber-optic cables in monetary terms, 2016-2020, RUB mln
Diagram 20. Balance of export and import of fiber optic cables, 2016-2020, million rubles
Diagram 21. Structure of export of fiber-optic cables by countries, 2020, %
Diagram 22. Dynamics of consumption of fiber-optic cables in natural terms, 2016 - 2020, m/person
Diagram 23. Forecast of the volume of the market for fiber optic cables in 2021-2025, thousand km


Tables 

Table 1. Dynamics of urban and rural population in India, 2014-2020, million people, %
Table 2. STEP Analysis of Factors Affecting the Fiber Optic Cable Market
Table 3. Major companies in the fiber optic cable market in India, 2020
Table 4. Profiles of companies participating in the fiber optic cable market in 2020
Table 5. Dynamics of production of fiber-optic cables in India by union territories, 2016-2020, thousand km
Table 6. Structure of imports of fiber optic cables by importing countries, 2020, %
Table 7. Tenders for the purchase of fiber optic cable announced from 01.01.2020/31.12.2020/1 to / / with an initial contract price of over million Rs.
Table 8. Average producer prices for fiber optic cables in the Union Territories in 2019-2020, Rs./km
Table 9. Average Consumer Prices for Fiber Optic Cables by State of India, Feb. 2021, Rs./km
Table 10. Assessment of factors of investment attractiveness of the fiber optic cable market


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