The Fibre Optic Cable Installation industry is growing at a fast pace. In the five years through 2012-13 the significance of fibre optic cables has grown enormously to the Australian telecommunication sector. The Federal Government has chosen to invest in building telecommunications technology for the coming decade through the National Broadband Network (NBN). Through the creation of NBN Co the government has single-handedly created a boom in the industry. Major construction companies have competed to engineer, install and maintain the new network as it is rolled out across the country. According to IBISWorld analyst Craig Shulman, “during the five years through 2012-13 the industry is forecast to grow at the astonishing annualised rate of 71.8%”. In 2012-13, the industry is forecast to generate $1.78 billion revenue, 236.7% more than the previous year.
NBN Co was established in 2009 to build a new national telecommunication network and sell space on this network to retail communications companies. In this year the company started operating trials, tendering for services and working with existing major players operating Hybrid Fibre Coaxial (HFC) networks. In the space of three years, the company has entered into agreements to phase out the HFC network and to build its replacement. “Accompanying NBN Co’s increasing activity has been huge growth in demand for industry services”, says Shulman. These have been primarily engineering and installation, with maintenance and repair expected to grow in significance as the network is completed. To meet increasing demand, employment and enterprises within the Fibre Optic Cable Installation industry have grown.
In the five years through 2017-18 this growth is expected to continue as the NBN rollout picks up pace. With government funding in place ahead of hoped-for private contribution, work is underway or the NBN is active in about 430 locations around Australia. Within a year, 720 more sites are expected to be added to that list. The demand dynamics at play in the industry mean that it is highly concentrated. The industry is dominated by the companies that have been selected through a tender process to construct the initial stages. Due to the scope of the project, few small players have been able to demonstrate the experience or capture the economies of scale to bid competitively. As a consequence, the industry is dominated by multinational construction companies and their joint ventures. When construction is complete in the long term, the industry will come to be dominated by maintenance services.