Our estimates for Q105 point to a year-on-year increase in global optical fibre volume output of 9.6 percent, to 16.3m fkm. In sequential terms, growth was much more subdued at 3.7 percent. On a regional level, sequential improvement has continued: Whilst activity in North America continues to accelerate, Europe is strengthening. The softening in demand that we reported in China back in March has corrected itself, at least sequentially, but this in itself does not necessarily signal a return to high level investment. Perhaps in the build-up to what recently has been confirmed as the eventual but not imminent consolidation amongst the six principal carriers, the CPPCC (Chinese People's Political Consultative Committee) has recently called for an overhaul of the Telecoms Act, with a view to creating more open competition guidelines for operators. Given the absence of regulation on issues such as local loop unbundling and rights of way, the market has simply followed its own path, with the obvious consequence of multiple network build-out. In conducting an audit, the CPPCC has concluded that there is considerable excess cable within the market at trunk level and beyond. One example cited has been the respective trans-provincial optical network build-out. Where one such network would suffice, six have actually been built, resulting in an excess outlay of some RMB100bn. We can presume that this figure includes an element of cross-subsidisation. In addition, the broadcasting sector and military have also been building their own networks. Should the same pattern of investment emerge within the access network, an estimated additional RMB200bn in overspend could result.
展开▼
