Japanese production of fibre optic cable in Ql 07 was 3.2 million fibre-km, compared to 3.8 million fibre-km in Ql 06. March 2006 was exceptionally strong, but the preliminary data reported for March 2007 suggest that there was a much more consistent level of demand in the first three months of 2007. The level of activity by NTT remains the key market driver. KDDI is teaming up with East Japan Railways to offer broadband services over fibre optic cables to 120,000 households in areas adjacent to shinkansen lines. The railway company already has a 5,300 km network used for in-house communications. New fibre optic connections will be installed to homes within 250 m of the railway line. Cable demand in China continues to remain strong, increasing to 4.8 million km in Ql 07 from 4.5 million fibre-km in Q4 06. So far, in Q2 07 growth has continued. Fibre and cable prices have been generally stable this year, as any upward pressure on prices has been neutralised by the centralised purchasing mechanism and excess production capacity. Exports of cable are also likely to be strong in 2007. Chinese telecom equipment vendors often procure Chinese-made cables for their overseas projects, while some JV manufacturers export cables to their foreign partners' customers.
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