For the first time in five years, US consumption of optical cable has dropped below 20 percent of the worldwide total. This happened in Q4 07, but US demand was 20 percent of the world's 2007 total. Based on the data available in early January, the US was 18 percent of worldwide consumption for Q4 08, and 19 percent for all of 2008. The figure shows the percentage of cabled fiber-km consumed. For many quarters of the past five years, the purchases of large US carriers, especially Verizon, had a significant effect on global growth trends. In 2005, the RBOCs were 55 percent of US optical cable demand, and this percentage dropped to 44 percent in 2008. Other US segments are growing more rapidly, and Verizon's demand has been flat for the past two years. We previously have noted that cable market growth in many markets depends on FTTx projects. The recent experience with Verizon shows the downside of this: once a carrier has ramped up to a peak rate of homes passed per year, cable purchases can remain high but not grow. This is also the situation with NTT of Japan and a few areas of Europe. New projects will be needed to achieve future growth.
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