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V. Rishi Kumar

Hyderabad , Sept. 19

THE optical fibre cable industry, driven by relatively lower than projected growth in the last two years, is expecting the implementation of the conditional access system, various broadband applications and direct-to-home business to fuel its growth during the current year and through to 2005.

Giving an overview of the OFC industry, the Managing Director of the Hyderabad-based Surana Telecom Ltd, Mr Narender Surana, told Business Line that during 2000, when the industry consumed about 2 million fibre kilometres, the projections were that the telecom industry would require about 3 million fibre km in 2001, and this was expected to grow to about 5 million fibre km during the years 2004 and 2005.

``However, these projections may be difficult to achieve given the current trend. As against these projections, the offtake was in the range of about 1.5 million. This resultant lower offtake was directly linked to the fact that the broadband applications and Internet applications did not materialise as was expected widely. In comparison, it is estimated that China adds about 8 million km of cable per year at an average, which is also reflected in the overall growth of the telecom sector there,'' Mr Surana said.

The other issue that has impacted the domestic and the global cable industry is the significant drop in cost of fibre. Against a high of $100 per km in 2001, it has crashed to about $10 per km. This has changed the overall market dynamics where the industry is not able to cope up with such major changes. This has further led to a situation where cable prices are ruling at about one fifth of the earlier price. The drop was witnessed over the last two years. As against Rs 1.12 lakh per cable route km, it is now hovering around Rs 30,000. The drop in cable price is not that bad.

There are about 21 manufacturers of OFC with a total installed capacity of about 5.12 million fibre km in the country. The industry expects CAS and broadband applications to spur the growth as coaxial cables are being replaced by OFC networks. If this materialises, as expected, given the current scenario, the industry could grow at double-digits. While the `infrastructure creators' are extended 5 per cent duty structure on finished cable, the cable industry has to pay about 15 per cent on raw material, he explained.

BSNL, which constantly provided huge orders up to 2001, has significantly deployed cable networks across the country. As against its earlier demand of about 1.2 lakh km, it is expected to be around 40,000 this year. Though this is relatively lower, it is still significant for the domestic cable industry.

With regard to the jelly-filed telecommunications cables, the supply always exceeded the demand. The current demand is expected to be about 200 lakh conductor km as against the installed capacity of 1600 lach km, thereby resulting in lower capacity utilisation. The demand is expected to taper down following the increased use of wireless applications.

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