Having made large investments in acquiring 3G and broadband wireless access spectrum in 2010, operators have reduced their spending in the past few years, especially on new network roll-outs. Also, the 2G spectrum controversy has led to holding back of investments in the sector.

Consequently, the ancillary segments of the telecom infrastructure industry have also taken a hit, which is reflected in the inadequate demand for telecom cables that are an important part of telecom infrastructure.

However, this trend is reversing gradually. The introduction of next-generation technologies has driven operators to upgrade their existing 2G networks to make them 3G- and 4G-compatible. Also, several greenfield sites are being rolled out and more are in the pipeline with operators preparing to launch 4G services.

Among the different types of cables being used in the telecom backbone, and for backhaul and access networks, optic fibre cable (OFC) has emerged as the medium of choice for their cost and performance benefits over other options like copper cables.

Several factors are driving the growth of the OFC industry. These include government initiatives aimed at bridging the digital divide as well as telecom operators’ plans to meet the growing demand.

OFC network deployment is likely to gain momentum over the next few years, making India one of the fastest growing markets in this segment.

However, issues related to right-of-way, long installation periods and upgradation to improved technologies need to be addressed to ensure this.

Wireline operators will continue to increase the penetration of OFC networks for providing broadband services. There is significant potential for OFC deployment in the fibre-to-the-home segment, as users are increasingly looking for high-speed broadband, high-definition video, unlimited anywhere telephony and real-time surveillance.

Also, the increasing demand for bandwidth-intensive applications, which often leads to network congestion, has resulted in operators using OFC for backhaul networks, which helps in offloading data traffic.

The National Optical Fibre Network (NOFN) project is expected to provide a major fillip to the OFC industry. It is aimed at increasing internet usage and improving connectivity in Tier 2 cities and rural areas. The USO Fund is likely to commit Rs 200 billion for the project. The recent establishment of a coordination committee by the Prime Minister’s Office to expedite the implementation of the NOFN will strengthen the segment’s growth prospects going forward.