Worldwide shortage of Optical Fiber

Worldwide shortage of Optical Fiber

The information highway is being paved with glass, but now the road crews are running low.

A worldwide shortage of optical fiber is slowing the construction of new telecommunications networks and forcing even big buyers to renegotiate supply agreements. Meanwhile, the shortfall is proving a bonanza for the small fraternity of fiber manufacturers as prices that fell for years have stabilized and in some cases even increased.

Behind it all has been an explosive growth in demand for fiber optic cable — bundled strands of optical fiber that can each carry thousands of telephone conversations in a glass thread as thin as an eyelash.

Driven by an expanding market for Internet access and other high-speed communications links, annual installation of optical fiber worldwide has doubled since 1993, to an estimated 16.25 million miles this year. That is a global fiber market of about $6 billion, with about one-third of the sales in North America, according to the KMI Corporation, a Newport, R.I., market research firm. And analysts and telecommunications executives agree that new forms of competition unleashed by the Telecommunications Act of 1996 insure that the appetite for fiber will not be sated soon.

”The rate at which the growth occurred has surprised just about everybody,” said Clifford L. Hund, telecommunications marketing director for Corning, the world’s largest optical fiber manufacturer. ”No one is getting all the fiber they want.”

Demand for optical fiber has run about 10 percent higher than production in the last year, leaving the supply about 1.25 million miles short of what buyers are seeking, said Robert P. Mohalley, a vice president at Lucent Technologies, the recently spun-off AT&T equipment unit that is the No. 2 optical fiber maker.

Customers ”have to wait a little longer to get some projects done,” Mr. Mohalley said. ”We’ve tried to share the pain.”

Re-posting from the NY Times Article: Fiber Optic Cable Demand Outstrips Supply – The New York Times (


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