A new Freedonia Group analysis forecasts demand for fiber optic cable to increase 3.0% per year to $3.6 billion in 2025, with investment in infrastructure to support the rollout of 5G networks among the key growth drivers. Ongoing increases in data traffic in both residential and commercial settings and increased penetration of last-mile fiber will also aid advances.
5G Rollout Expands Across the US
The large-scale commercial rollout of 5G in the US began in mid-2019 and significantly increased in 2020. By the end of 2020, around 75% of the US population lived in areas with at least some 5G coverage, and this figure is expected to exceed 80% in 2021. However, 5G networks remain underdeveloped, and it is estimated that only around 10% of mobile devices in the US are 5G activated as of mid-2021. Significant further investment will be required before 5G networks will be able to perform at an adequate level for universal adoption.
Impact on Fiber Optic Cable Industry
The main driver of fiber optic cable demand in 5G networks will be densification efforts, under which large numbers of small cell nodes will be constructed and connected to broader networks. In high usage areas, it is estimated that 5G networks will ultimately include dozens or even hundreds of cells per square mile, all of which will require fiber optic cable.
While the 5G rollout will be a major ongoing source of fiber optic cable sales going forward, it is not expected to produce particularly rapid short-term growth:
- The construction of small cell networks is an expensive, labor-intensive process, and it is unlikely to be compressed into a short period. Instead, construction and improvement of these networks will continue throughout the 2020s.
- In addition, the maturity of the conventional telecommunications backbone segment will offset 5G-related gains to an extent.
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Fiber Optic Cable analyzes US supply of and demand for fiber optic cable products. Historical data (2010, 2015, and 2020) and forecasts for 2025 and 2030 are provided in millions of dollars for demand, shipments, and net exports. Major product types covered are
- single mode
Historical and forecast sales are also provided for major end use markets:
- telecommunications, including backbone and last-mile applications
- construction and other markets (e.g., motor vehicles, aerospace).