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[EDITORIAL] Nigeria should venture into fiber optic cable manufacturing

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Fiber optic cables in a duct

Nigeria will remain a construction site for a very long time, especially in the area of fiber optic cable deployment for broadband.

No doubt, internet broadband penetration has increased globally as a result of various fiber optic technologies employed. Nigeria fiber optic network is also massive and very enterprising because the nation has great potentials in utilizing Internet broadband bandwidths as the largest Black Country in the world.

The country presently has active submarine fiber optic cables connecting the country to the world through Europe with huge Internet broadband capacities. However, the Internet broadband penetration in the country is still very low with about little above 10% of the Oceanic Optical fiber capacities utilized and less than 35% of fiber optic broadband penetration.

Nigeria's broadband penetration

Fiber optics is one of the methods of transmitting information that works by sending pulses of light through an optical fiber. The light transmitted forms an electromagnetic carrier wave modulated to carry information. Optical fiber cable (OFC), especially for telecommunication companies, has become a preferred transmission medium catering to aggressive bandwidth demands. Furthermore, the increasing cloud-based applications, audio-video services, and Video-on-Demand (VoD) services stimulate the demand of fiber optic cable.

We believe now is the time Nigeria should delve into telecoms equipment manufacturing as everything is being  imported presently. The danger is that you lack indepth knowledge about the source. Unfortunately, the users are seemingly, just concerned about cheaper products. On the other hand, they have no choice, because in the absent alternative, the fake becomes original.

If you look at it, the fiber optic cable market is moderately fragmented. And we understand that capital requirements for setting up new firms can be prohibitively high in few of the regions, especially in Africa. Moreover, market incumbents have a considerable advantage over new entrants, particularly in gaining access to the channels of distribution and R&D activities.

Product launches, high expense on research and development, partnerships and acquisitions, etc. are the prime growth strategies adopted by these companies to sustain the intense competition. Some of the major players in the fiber optic cables market, include Corning Inc., Finisar Corporation, Prysmian Group, and General Cable Corporation, among others, as shown in this report.

fiber optic cable

Source: mordorintelligence.com.

Segmentation: The Fiber Optic Cable Market is segmented by Cable Type (Single-mode and Multi-mode), Optical Fiber Type (Plastic and Glass), End-user Industry (IT and Telecom, BFSI, Defense and Aerospace, Healthcare, Manufacturing, and Government), and Geography.

Fiber Optic Cable Market: Growth, trends and forecast (2019 – 2024)

The fiber optic cable market is expected to witness growth, registering a CAGR of 12.26% during the forecast period of 2019-2024, according to Morder Intelligence report.

With the increasing demand for IoT and more number of connected devices, data transmission has become vital for the users. Hence, the fiber optic cable market is witnessing a huge opportunity of growth during the forecast period.

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Aside that, technological advancements in the telecom sector have increased the deployment of broadband network architectures.

Fiber to the Home (FTTH) and Fiber to the Building (FTTB) are the few prominent broadband networking architectures that necessitate the large-scale deployment of fiber optic networks. This factor is driving the demand for fiber optic cables. MainOne Cable has recently launched a N25billion project to build 3,000kms of fiber optic cable network across Lagos. Imagine a situation the cables are sourced locally.

The major benefit of fiber optic cable is the increased security option that cannot be tapped with the traditional copper cable. This is another major factor driving the fiber optic cables market.

However, high costs and complex installation act as the major restraining factors for fiber optic cables market. When companies like MainOne, WACC, MTN, Glo1, Broadbased Communications, etc., source the cables abroad, passing through rigorous customs processes and on getting to the point of deployment, they face fresh hurdles. These are anti-development.

fiber optic cable

Source: mordorintelligence.com

The issue of Right-of-Way has been on the front-burner too. We believe that manufacturing fiber optic cables in Nigeria will lead to reduction in cost of deployment and invariably, reduction in cost of broadband.

The core fiber optic network in Nigeria

Today, Nigeria can boast of six active international submarine fiber optic cable networks that formed the core networks.

Five of them are connected to the world via Europe while one is connected to a neighbouring country, Cameroun. The landing points of all these are in Lagos State. The submarine cable to Cameroun is called Nigeria Cameroun Submarine Cable (NCSCS) with cable length of 1,100km. It’s owned by Cameroun Telecom (Camtel) and its landing points are Kribi, Cameroun and Lagos, Nigeria.

The submarine fiber optic cables connecting the country to the world through Europe have capacity exceeding 27Tbps. The detail of the deployment is highlighted below;

SAT-3/WACS, deployed in April, 2002. The cable length is 14,350km. It is jointly owned by Nigeria (NATCOM) and other Countries/Companies.

MainOne, deployed in July 2010. The cable length is 7,000km. It is owned by MainOne Cable Company.

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Glo 1, deployed in October 2010 with cable length of 9,800km. It is owned by Globacom Limited.

West Africa Cable System (WACS), deployed in May 2012 with cable length of 14,530km. It is jointly owned by MTN Group and others and was upgraded in 2015.

African Coast to Europe (ACE), deployed in December 2013 with cable length of 17,000km. It is jointly owned by Dolphin Telecoms and others.

fiber optic cable

Table summarizes the submarine cables deployed to Nigeria. Source: sapub.org

Key Market Trends

IT and Telecom Sector Offers Potential Growth

According to the Morder Intelligence report, Fiber optics is a major building block in the telecommunication infrastructure. With the explosion of information traffic owing to the internet, electronic commerce, computer networks, multimedia, voice, data, and video, the need for a transmission medium with the bandwidth capabilities for handling such vast amounts of information is paramount. Fiber optics, with its comparatively infinite bandwidth, has proven to be the solution.

Additionally, 5G, IoT, and Big Data rely heavily on real-time data collection and transfer. As fiber optics has unlimited bandwidth potential, fiberoptics cable is chosen to support these bandwidth levels.

Further, to achieve the expected performance levels for 5G networks, more small cells (or nodes) and mobile edge computing will be needed to eliminate network bottlenecks. These small-cell deployments often utilize the millimeter wave spectrum by relying heavily on fiber cabled connections for the backhaul portion of the network.

The launch of 5G will bring enhanced capacity and lower latency straight to networks. Fiber optics cable is the preferred option for 5G because of its scalability, security, and ability to handle the vast amount of backhaul traffic being generated.

fiber optic cable

Leading Fiber Optic Cable manufacturers. Source: mordorintelligence.com

This, in return, is expected to create a huge market opportunity for the fiber optic cable market in IT and Telecom.

Nigeria has all it takes to become Africa’s Fiber optic cable supplier. We believe Nigeria should go into fibre optic cable manufacturing, though it will be difficult as it is expensive. But we can do the cabling portion which is the main thing. The other way to go about it is enter into partnership with international firms, probably from Germany to set up the factory in Nigeria. That will a big achievement and for West Africa, as no company manufactures such in the region.

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