Copper prices, theft to boost fiber deployments
In the communications world, we normally analyze the pros and cons of fiber-optic communications and copper communications based on bandwidth, distance, voice channels, distortion, and power.
We also analyze the pricing and readiness of optical components for the next generation of optical communications. Rarely do we consider the raw material components of fiber optics or copper cables; however, this is a factor that should not be overlooked.
In fact, comparing forecasts for rising copper prices, shortages, and theft alongside the costs of fiber optics and the advancements in both flexible fiber and fiber installation technologies provides some important insights.
Rising metal prices are being linked to the rise in copper thefts worldwide, with articles and videos on copper theft littering the Internet. Anti-copper theft solutions include the installation of fiber-based network monitoring and surveillance to protect the copper cables. So potentially, the rising cost of copper will be a major driver for fiber optics.
Numerous articles discuss the rising price of copper and the “hoarding” of copper by developing countries such as China. According to Goldman Sachs analysts in a mid-December 2010 commodity report, “extreme weakness in US demand over the past two years has allowed China to grow unconstrained without any competition for raw materials.”
Various forecasts for 2011 copper pricing center around $11,000 per metric ton for late 2011, compared to $9,438 in early January 2011, and to closing prices of $2,902 per metric ton in December 2008.
Historically, the costs of building fiber-optics networks were very high when compared to copper networks. Fiber installations required highly trained specialists, costly equipment, and hours for splicing.
By mid-year 2010, numerous reports stated that fiber-optic cable costs had dropped to a point where fiber cabling was highly competitive with copper media. In addition, the installation costs for fiber networking have dropped and are approaching those of copper.
Significant improvements include bendable fiber and new fiber-termination technologies along with the availability of many more fiber-trained technicians. An AT&T technician was quoted as saying that the epoxy bonding process for fiber termination may take less time than installing coaxial connectors today.
Metal theft increases in step with increases in worldwide metal prices. According to the ICF (International Cablemakers Federation), the theft is widespread and is not limited to poor, developing countries.
For example, telecom carriers in the US have regular problems with theft of pole-mounted copper telecom cables. There were 190,000 reported incidents of theft of US telecom facilities in 2006, up from 53,000 in 2005. The ICF further states that copper theft is encouraging poorer countries to adopt wireless networking as the only viable solution. However, there has been theft of the copper cables within wireless base stations.
There have been reports of the theft of fiber-optic cables, but very few incidents compared to the epidemic of copper theft. According to the ICF, the scrap value of such cables is negligible.
Vendors are selling solutions to help prevent copper theft. These products include typical anti-theft monitoring and surveillance devices that are applied to central offices and base station environments.
According to various reports, the copper cabling in a cell tower can be protected for around $2,000. One vendor features a fiber-based, remote-terminal unit for network monitoring. Yes, the solution uses fiber networking and ports to protect copper wiring assets.
While we could not find forecasts for the number of incidents of copper theft expected in 2011, we can assume that with rising copper prices, the number of thefts will continue to grow.
The theft of copper is threatening the “five nines” of reliability among traditional telephone carriers. Not only can it take hours or days to replace the copper wiring, but the replacement cost of the copper wiring is increasing as copper prices increase.
The costs of no-service and higher prices for the copper wiring should be enough to get the carriers to move to fiber. More bandwidth, longer distances, and lower power consumption are the icing on the cake.