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Study challenges “fiber glut” assumption

Astudy that challenges the presumptions that there is too much fiber in the market and that prices have dropped to "give away" levels has been released by the United Telecom Council (UTC) of Washingto...


November 1, 2001  


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Astudy that challenges the presumptions that there is too much fiber in the market and that prices have dropped to “give away” levels has been released by the United Telecom Council (UTC) of Washington, DC.

The organization — a telecom and IT trade association for utilities, water companies, energy pipelines and other infrastructure companies — found in its 2001 Fiber Rate Study that while prices for dark fiber and bandwidth in the U.S. are falling in most areas, demand is increasing in many markets. Further, the report shows that the market is not experiencing the condition of fiber and bandwidth glut that analysts have been reporting in recent months.

“The convention wisdom about fiber in America is wrong,” said Bill Moroney, president and CEO of the UTC. “There is absolutely no glut of fiber. There is, in fact, an ever-increasing demand for fiber where not enough exists today — in metro markets.”

Beth Griffiths, UTC Director of Research, says we have heard “a lot of bad press in the industry, based upon falling stock prices and the consolidation of companies. However, this hasn’t impacted demand as strongly as many people are suggesting.” She says the study shows that there are still many opportunities for carriers’ carriers to make good money providing fiber-based services.

The study paints a rosy picture for UTelcos, utilities and energy companies’ wholesale telecom subsidiaries. “At a time when so many new competitive telecom providers are experiencing severe financial problems, fiber leasers are showing a distinct preference to carriers’ carriers like UTelcos that are part of a financially stable utility,” says Moroney.

According to the UTC, those who have pointed to a so-called bandwidth “glut” may be relying on statistics that show more than 80 per cent of long-haul, inter-city fiber has yet to be used. While the UTC study shows pricing for long-haul fiber is declining, it has not reached commodity levels. UTC also notes that as usage grows on metro fiber networks being built, usage of the long-haul networks will increase.

For additional information about the study, please contact the UTC Research Department at (202) 872.0030 or via e-mail at research@utc.org.


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