Ql 06 rebounded strongly after the slowdown during Q4 05. During Ql 06 fibre optic cable production in North America grew 5 percent y-o-y and 19 percent sequentially. North American demand for Ql 06 was flat in y-o-y terms, but grew 18 percent over Q4 05. As has been the case for the past eight quarters, over 95 percent of fibre optic cable production and about 90 percent of fibre optic cable demand was US-driven, primarily by FTTx projects. This consistency in demand is significant, since it marks two very strong first quarters in consecutive years. Unlike Ql 05, when Verizon opened the floodgates, only to find out that it wasn't adequately prepared to handle the volume of cable, in 2006 we are seeing a more realistic and manage able level of orders from Verizon. Looking north and south of the US, in Ql 06 Canada showed an 8 percent y-o-y and 10 percent sequential growth in demand as FTTx project activity increases. Much of the excess US cable production went to Canada to support large projects, such as the Alberta SuperNet. After a very strong 2005, driven by utility-based telecom projects, demand in Mexico declined by 37 percent y-o-y and 10 percent sequentially.
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