Fiber optic cable cost doubles as demand rises

Fiber optic cable cost doubles as demand rises

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It’s been a few years now that we’ve experienced price increases in almost every aspect of our lives. We can talk about price increases in foods, gasoline, hardware and a host of other things. One of those affected, which is quite important in our lives, is the fiber optic cablewho has seen his cost double in just 16 months. And this, while the demand for it shoots up more and more.

In the world of hardware we are going through a time of component shortages, affecting all sectors. One of them is fiber optic cables, those that have allowed us to enjoy a much faster and more stable internet connection. These have seen their price multiply by two in just over a year due to the enormous demand of the network providers Y data centersadded to the lack of stock and factory closures due to the COVID-19.

In March 2021 the fiber kilometer was worth 3.7 dollars, now it costs 6.3 dollars

According to the market researcher Cru Group, the average price that fiber had in March 2021, was 3.7 dollars per kilometer of fiber, while it currently costs 6.3 dollars. On the other hand, the use of fiber optic cables has increased by a 8.1% year-on-year from the first half of 2022. Among the countries that use it the most, China top the list with a 46% of global usage, while North Americawhich is where demand grows the most, represents the fifteen% in use worldwide.

One of the causes that produce the shortage of fiber optic cables to meet the current demand would be helium. This is generated in floors manufacturing of Russia Y USAwhich suffered interruptions last year. Because of this, the cost of helium used to create fiber optic cables has more than doubled in the last two years. Thus, helium has reached $2,000 by dewar (its container) of 100 liters.

The situation is so critical that Wendell Weeks, CEO of Corning, one of the largest producers of fiber optic cables in the world, says it has not seen such a crisis. However, he shows an optimistic approach that his company will overcome this situation. And it is that, the company increased its production, obtaining during the first quarter $1.3 billion in revenuea 28% more.

Delivery times for fiber optic cables range from 20 weeks to more than a year

Delivery Times for Fiber Optic Cables

The increase in the cost of fiber optic cable, added to the lack of stock and the long delivery times, are making a dent in the market. For example in United Kingdom the the price of the cables has risen in a fifty% and directors like simon hansford, UK Cloud CEOThey have shown their concern. Given this situation of scarcity, increased demand and delivery times that are too long, planning the purchase of this becomes a problem for companies.

But it is not the only sector affected, since the retailers they have to wait long amounts of time to receive these leads. And it is that, according to Martin Blankenexecutive director of Exa InfrastructureWe are talking about some delivery times that pass the 20 weeks to more than a year. Even so, the Cru research group assures that the supply in USA it works relatively better than in Europe or China. This is because the domestic production of fiber optic cables in the US receives stimulus packages.

Thus, the Rural Digital Opportunities Fund of the Federal Communications Commissionendowed with $20.4 billion. There is also the Law on Investment in Infrastructure and Employment, which has $1.2 trillion to invest, where $550 billion correspond to federal expenses. For this reason, producers such as Corning take advantage of the situation and claim to have used $275 million in capital expenditures during 2021.

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