PETER DYKES PRYSMIAN Q&A
of an optical fibre technology because the company is the consolidation of the European industry. We own one of the three technologies in the world to make fibre, one is American, one is Japanese and shared between the Japanese players, and one is European. The European is Prysmian, because over time we have consolidated that market by buying the assets and the intellectual properties of those companies that have invested in fibre over the last 40 years. They all gave up, the likes of Philips, Alcatel and Nokia. They were in that business making fibre but at some point, they all decided to give up and we bought the technology. Our strategy is basically two things; we are and want to remain the leader in the cable, telecom and energy industries, also, we want to grow by acquisition because in such a fragmented market, value can only be created by buying the others and creating synergies. OC How big is the global cable market? PV If you take the cable market, globally it is worth between €120 billion to €150 billion and we’ve got 11 of these billions and are by far the number one and twice the size of the second largest company in the market for cables in general. Also, we are more or less equal to the other seven big players in optical cable. If you take the optical cable world, this year, 500 million kilometres will be installed globally. This market is shared by those having enough technology to be a big player on the optical side of things and we are one of seven significant players. Each of these players have more or less 10% of the optical market worldwide, so we each have between 40 and 60 million kilometres of sales. Then you have lower, tier two players, but there aren’t many of them because it is a difficult market to access. You need the technology and you need to invest significantly to be able to make fibre. It’s a relatively closed world, but it’s global. The same fibre will go in a network in China and in a network in the US and in Europe. It’s an open world dominated by these seven players. PV It is about two things: proposing the real solutions that our customers will need by understanding the customer, for which you need to be local. You do not understand BT if you are not British and you do not understand Orange if you’re not French, for example. Customers have their own specificities and they don’t want the same cables exactly. They have different CapEx constraints, different rights of OC How does Prysmian intend to maintain its position in the market?
Philippe Vanhille, EVP, Telecom Business, Prysmian Group
ways etc., so we work very closely with them to always optimise our solutions for their specific needs. The other side of the coin is to always be in the lead in terms of cost, because the five big Chinese competitors do not stand still. They are clever, they are more or less playing a fair game commercially and they can benefit from different fiscal or government grants, so they are tough guys and are always going on price. So, we always have to be able to take a fight occasionally. It’s a combination of investing a lot in R&D and being able to fight, so we permanently work to improve our costs, which we achieve by working on the processes and being in the right places for production to be as cheap as possible, but it’s an ongoing process. The other side is to work with customers. When we work with customers, our value to them is to reduce their CapEx. When they have to build a network, they have to invest massively of course, which is a burden for them and our products represent something like 10% of their CapEx. The rest is installation. They have to pull our cables into civil works and they have to find the right ways to do it. So, we offer them easy to install cables or smaller solutions that are going to be easily installed, thereby saving them a lot of money. We always make our cables smaller and more flexible and time- saving, which is part of our success. It’s very technical because a cable’s lifetime is about 25 years and I can guarantee that a cable installed today in for example a street in London, will suffer a lot in these 25 years, because of natural fatigue caused by temperature cycling throughout the year. Also, there are permanent ongoing civil works, so the cable has to be robust, it has to be easy to install and this is why the companies that like us have an advantage because we create value for our customers in terms of robustness and easy of
installation. It is very much about designing the right cable for a particular situation. OC What would you say are among the most significant market trends at the moment? PV We are having a hyperscale datacentre boom, which of course is a very significant trend in the market, but we also have edge computing. Putting data ever closer to the consumer, which leads to smaller- scale datacentres everywhere in the network. Basically, these two trends are happening in parallel. Hyperscale data centres are like cities, and we have developed specific products for them because these big data centres need the interior cabling but they also need very strong connections between the buildings on the campuses. For that we have developed the biggest cable in the market, which has 6,912 fibres in a single cable which we have just launched [at the FTTH Europe expo]. We have however got traction [for the cable] from our traditional customers as well, because one of their issues is that they have congested ducts everywhere, so if they can put more fibre in one square millimetre, they love it because it saves them money. We are always going to put more fibre in our cables, but this one is a breakthrough. We developed it first for some customers who came to us with a request for a high-capacity cable. We developed cables of up to three thousand fibres, and now we are up to nearly seven thousand, but it’s still relatively small and it will still go into a two-inch duct. It is also important not to be intrusive. In some parts of the world it does not matter if a cable is visible, but 5G is on its way and there will be an antenna every 200 metres and you will need a cable to feed the antenna with data and power, so we are working on that as well.
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ISSUE 17 | Q2 2019
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