Page 31 - Analysis Report of Global Market in the Submarine Cable Field (2017)

HUAWEI marine will establish their own brand in the long distance With the construction implementation of submarine monitoring network,
submarine cable market. Chinese enterprises will usher in a new turning it is predicted that submarine cable and junction box business of relevant
point in this market. company will achieve rapid breakthrough.

Asia Africa and the Middle East etc. become hot spots
According to investigation of NTI, the authorized consultant company Summary: Good timing, geographical convenience with good human
of communication industry, since 2015, the total investment amount for relations, China’s submarine cable industry ushers in development
the 160 newly constructed submarine fiber optic cableprojects reach turning point
to $22.6 billion USD. According to the confirmation and implementation Seeing from the industrial demand, the international IP data flow
of the contract, fund raising of investment capital, the marine invest interaction need speeds up its increase, previous peak submarine
igation and classification judgment of contracted agreement signing cable communication system’s construction has already faced up with
situation, there will be 108 submarine cables launched into operation upgrading. From domestic technical reserves’ point of view,
or put into construction in upcoming several years, with the market ZTT, Fiberhome, Hengtong Optic-electronics improved their
size up to $13 billion USD. It can be found by these statistics of the submarine cable capacity rapidly, who already have international
submarine cable project, the South Asia, the Middle East, Asia, Europe competitiveness. Meanwhile the production expansion project
and Africa’s market has huge potentiality. of new submarine cable also have been in building and
the are releasing production capacity. Under the background of HUAWEI
Figure 16 Regional analysis of newly constructed submarine marine integrated construction’s improved influence, China’s
optic fiber cable (Statistics of 2015-2018) submarine cable industry is expected to accelerate its development. F
rom the layout of the industry, it can be seen that the former industrial
Giant enterprise Alcatel Lucent is largely affected by merging and
acquisition, while China’s The Belt and Road construction is expected to
accelerate for promotion. Domestic submarine cable enterprisesare now
ushering in their best development age, whose performance is expected
to achieve rapid breakthrough.

6. Major companies’ analysis: ZTT, Hengtong Optic-Electric,
FiberHome Communications, Tongguang Electronics
Under the background of continuous increasing emphasis on marine
economy and security, the domestic relevant companies' ability of
building submarine communication systems has rapidly improved. As
the leading enterprise of communication equipment industry, HUAWEI
made breakthrough fast in EPC, repeaters and branches, even acquired
In regions of Asia, Africa and the Middle East etc., China’s the construction rights of Cameroon - Brazil submarine cable line, which
c o m m u n i c a t i o n s e q u i p m e n t c o m p a n y s u c h will further level up China submarine cable’s position in international
as HUAWEI have become of the chief supplier of communications submarine cable field. In addition, FiberHome communication, ZTT,
equipment in these areas by their excellent technology, flexible and Hengtong Optic-Electric and Tongguang Electronics are also speeding
qualified service and competitive prices. They have formed a good up their technology and capacity in building submarine cable. With
cooperation relationship with those operators, showing Chinese fast steps of Belt and Road Initiative and construction of submarine
enterprises’ advantages over traditional European and American monitoring networks, domestic cable sector is expected to usher in the
enterprises in these areas. peak of construction, and promote the fast business improvement of
relevant companies.
Submarine monitoring network’s demand is huge, the domestic
cable demand further speed up. Table 9 Contrast of domestic companies’ submarine cable business
In addition, the construction of the ocean observation network is very
meaningful to improve China’s marine comprehensive strength and
safeguard national security. As early as 1970s, the United States
established a submarine detection system, while the construction of
China’s submarine observation network is significantly left behind. In
2009, China began its construction of the first submarineobservation
network - the China’s East Sea observation network.
According to the submarine optical cable project released, thesubmarine
The coastline of China's mainland is 18 thousand kilometers, with the cable mileage completedin year 2016-2018 are 85 thousand, 101
maritime boundary line of about 20 thousand kilometers. Considering the thousand and 131 thousand respectively. Considering some short
coverage of the whole sea area, the length of the trunk line is estimated distance lines have not been announced, and under the background that
to be about 20 thousand kilometers. According to our calculations, the submarine optical cable systems are gradually being replaced, we
a one-time submarine photoelectric hybrid cable and junction box predict that the actual demand in year 2017-2018 will be higher than the
equipment investment is around 23.5 billion. At present, the enterprises released newly constructed mileages. Meanwhile, under the background
within the industry who has submarine photoelectric hybrid cable of the rapid growth of HUAWEI as submarine contractor representative
and junction box production capacity are only ZTT, Hengtong Optic- and national Belt and Road Initiative policies’ promotion acceleration,
electronic, Tongguang Cable, FiberHome and Highlander etc. the submarine optical cable share is expected to increase steadily, and
to reach 15%’s market share in year 2018. To calculate by the market
Table 8 Prediction of demand for submarine monitoring system average price of 90 thousand yuan / km for submarine optical cable
(current market feedback is between 80-100 thousand), and the net profit
of 30%, the relevant plate profit is expected to double.

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