Joe Jensen, Corning’s Director of FTTH Market Development for the Americas, told Fierce the current state of the broadband market is unlike anything he’s seen over the past two decades, with operator enthusiasm high and money pouring in from all sides. But he noted telecoms still face a number of challenges, among these figuring out how to get a cut of all the new funding and finding the labor force to get their projects done.
Perhaps unsurprisingly, Jensen pointed to the pandemic as a catalyst for much of the current activity, noting it validated the idea that broadband is critical infrastructure and helped spur higher fiber take rates among consumers.
“What we had seen up to this point in time was that carriers were really scrutinizing their business cases for deploying,” he said. “What we’re seeing now, though, is that this is kind of pushing things past a tipping point. Folks in rural markets are starting to look at building, folks in underserved municipal markets are looking at building and there’s a tremendous amount of capital flowing into the space – whether through government funding or private equity firms – that’s really fueling that growth.”
A report issued by market research and consulting company RVA LLC in July forecast 61 million homes will be passed with fiber in the five-year period from 2021 to 2025, a figure it flagged as more “than in all of FTTH history combined”. Approximately 40.7 million of these were part of its base forecast, with an additional 4.3 million attributed to builds fueled by the Rural Digital Opportunity Fund Phase I auction and 16 million expected to spring from a U.S. infrastructure deal currently being considered by Congress.
But even this environment comes with challenges. For instance, though there’s a glut of money available to fuel broadband builds, Jensen said navigating all the different programs is hard. The main issue is “understanding the right fund to use and how to apply,” he said.
He also pointed to competition over limited labor resources as an ongoing problem and flagged access to reliable coverage data as another hurdle. The latter is “frustrating our customers as they go to apply for funding,” he said.
For operators looking to connect rural and remote areas with fiber, gaining access to middle mile transport is also proving to be difficult. “Really it comes down to middle mile fiber’s not everywhere,” he said. “One of the things we’ve heard is if it does exist, ok that’s one thing that’s great. But it may be owned by an incumbent, for example, and the incumbent may not necessarily be willing to share that middle mile fiber, at least not at an economical rate.”
Despite the difficulties, Jensen said there’s “just a lot of positive momentum in the space.” And Corning is already reaping the benefits. The company’s Optical Communications business posted its third consecutive quarter of year-on-year growth in Q2 2021, with revenue rising 21% to $1.08 billion and net income up 83% to $148 million.
Corning CEO Wendell Weeks said on the company's earnings call last week it has seen a strong uptick in orders in the optical segment, citing "year-over-year growth in double-digit percentages in both carrier and enterprise networks." He concluded "we believe we're in the early innings of a large capital deployment cycle across 5G, fiber to the home and hyperscale data centers."