November 1, 2007
1:05 PM -- On yesterday's JDSU (Nasdaq: JDSU; Toronto: JDU) earnings call, CEO Kevin Kennedy rattled off five signs that fiber is "extending closer to the subscriber," at least in the European market. Not exactly Letterman fare, but worth a listen:
It's less expensive to maintain. "Fiber can be as much as an order of magnitude less expensive to maintain than copper," he said. Emphasis on "can," implying it's not always true. (I'd be surprised if it were.)
European regulations could soon help "drive an earlier embrace of fiber reach into the access layer."
The usual TV/video argument: Bandwidth is expected to grow to the point where the network needs more fiber, less copper. Don't tell that to AT&T Inc. (NYSE: T).
The price of copper itself is going up.
ROADM economics are improving, meaning carriers might start upgrading their optical networks. "The optical layer and components business, as well as test-and-measurement equipment, could see an increase in demand." This one doesn't seem as relevant to the "closer to the subscriber" argument, but go with it.
Some of the arguments are stronger than others. No. 4 doesn't matter if a carrier is considering new fiber vs. installed copper. It gets trumped by No. 1 anyway, since materials costs aren't a deciding factor, not next to costs of labor and operations.
No. 5 isn't necessarily a last-mile effect. Mainly, it's a tangent to plug JDSU's "agile optical" strategy.
No. 3 has been said so often, you start wondering if it's untrue, à la 1999.
Those first two points make a decent argument, though. Carriers can't avoid the cost of laying fiber, but if every other aspect of fiber becomes cheaper than copper, then that initial expense can pay off.
— Craig Matsumoto, West Coast Editor, Light Reading
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