BIoT Canada

Upbeat in a down time

One can only hope that veteran industry analyst Frank Murawski's predictions for the worldwide structured cabling market (see story p. 6) hold true for if they do, the economic downturn headed this wa...

May 1, 2008  

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One can only hope that veteran industry analyst Frank Murawski’s predictions for the worldwide structured cabling market (see story p. 6) hold true for if they do, the economic downturn headed this way could end up bypassing the fiber, copper, networking, infrastructure and telecommunications sectors.

Should that occur, there will be opportunities not layoffs for cabling, hardware, networking, telecommunications and programming professionals at a time when the economic effects of the subprime mortgage fiasco in the U. S. are spreading like a plague around the world.

Dr. Ronald Utt, a member of The Heritage Foundation, a Washington, D. C. think tank, wrote in a report released in April that the collapse of the market in late 2006 set in motion a chain reaction of economic and financial adversity that has spread to global financial markets, created depression-like conditions in the U. S. housing market and pushed that nation’s economy to the brink of recession.

Murawski, president of FTM Consulting Inc. and author of a new study on the worldwide structure cabling system (SCS) market, does not agree.

“There is no recession, basically,” he told me in a recent phone interview. “I just think it’s a short-lived decrease in growth. When I interviewed people in the fourth quarter of last year, the edge of the world was falling off. I re-interviewed them three months later and they were overly optimistic.”

To be fair, he was referring specifically to the SCS market and not the U. S. economy as a whole. That said, he has no intention of scaling down his initial projections, which he estimates will see the market grow from US$15.3 billion this year to US$29.1 billion by 2013, which equates to a compound annual growth rate of 13.7%.

Murawski may be on to something. On May 7 the Toronto Star’s business section contained three separate items from the U. S. that dealt with gaming, finance and technology.

MGM Mirage Inc, the world’s second largest casino operator, reported that quarterly profits fell 30% as a slower economy cut into spending by gamblers, while Swiss bank UBS announced it would lay off 5,500 employees and sell billions of dollars of “ailing assets in a bid to break free from the U. S. subprime mortgage crisis.”

Verizon Business, meanwhile, announced it was joining a consortium of 16 companies building a next-generation undersea optical cable system connecting Europe, the Middle East and India.

A new 15,000-kilometre cable network system is expected to be completed in 2010 and connect three continents at a cost of more than US$700 million.

The system will have a design capacity of 3.84 terabits per second (Tbps) and Verizon says it will reduce latency, reduce provisioning time and increase reliability.

Murawski, who has been covering the SCS market for 15 years, is not alone when it comes to making bullish predictions.

In February, Infonetics Research predicted that the worldwide sales of fixed and mobile Wi-Max equipment, which totaled just under US$800 million last year, will mushroom to US$7.7 billion by 2011. The firm notes that the technology has been deployed in more than 80 countries and that commercial networks will continue to grow in both number and size in 2008 and beyond.

Infonetics is also predicting that worldwide optical manufacturer revenues will grow to more than US$13 billion in 2010 as WDM product revenue increases and SONET/SDH revenue decreases starting this year.

The Telecommunications Industry Association (TIA) is now estimating the industry will grow at a 9.2% from 2008 to 2011 and be worth US$4.9 trillion by the end of the reporting period.

Time will tell.