IT Systems Management

As Infrastructure Improves, 5G Expansion will Sustain Fiber Optic Cable Demand Throughout the 2020s

According to a recent Freedonia Group analysis, demand for fiber optic cable will rise 3.0% per year to $3.6 billion in 2025, with investment in infrastructure to enable the rollout of 5G networks being one of the main growth drivers. In addition, continuous increases in data traffic in residential and commercial settings and increasing penetration of last-mile fiber will also contribute to progress.

5G Rollout Expands Across the US

The commercial deployment of 5G in the United States started in mid-2019 and will be substantially expanded in 2020. By the end of 2020, about 75% of the US population was living in areas with at least some 5G coverage, and this number is expected to exceed 80% by 2021. However, 5G networks are still undeveloped, and it is estimated that only around 10% of mobile devices in the United States will be 5G enabled by mid-2021. Thus, significantly more investment will be required before 5G networks can operate at an acceptable level for rollout.

Impact on Fiber Optic Cable Industry

Densification initiatives, in which many small cell nodes are built and linked to larger networks, will be the primary driver of fiber optic cable demand in 5G networks. In densely populated regions, it is expected that 5G networks will eventually include dozens, if not hundreds, of cells per square mile, all of which will need the use of fiber optic cable.

While the 5G deployment is anticipated to be a significant continuing source of fiber optic cable sales in the future, it is not expected to generate especially fast short-term growth:

Small cell network construction is a costly, labor-intensive operation that is unlikely to be completed in a short period of time. Instead, these networks' construction and improvement will continue throughout the 2020s.

Furthermore, the maturity of the traditional telecommunications backbone sector will somewhat offset 5G-related gains.

About the Freedonia Group

The Freedonia Group, a subsidiary of MarketResearch.com, is the leading worldwide industrial research company, offering product analyses, market forecasts, industry trends, and market share data to our clients. From one-person consulting firms to global conglomerates, our analysts offer impartial, reliable industry market research and analysis to assist organizations in making business-critical choices. We assist over 90% of the industrial Fortune 500 companies, with over 100 studies published each year.

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