Overcapacity leads to falling prices

Overcapacity leads to a drop in the price of optical fiber, and the neglect of quality monitoring by coal mining causes a crisis of industrial quality integrity. Under the double challenge, the optical fiber industry chain can easily fall into a vicious circle of vicious competition.

“Looking at today’s prices, people who don’t know it may not know that the price per kilometer of fiber was as high as 1,800 yuan in 2001. But now the price is only 60-70 yuan.” On February 8, the China Cable and Cable Professional Committee united the industry. Most cable manufacturers in Beijing held the "Concerning the Convening of a Symposium on Strengthening Quality Management and Building a Green Safety Network", which became the main theme of the venue.

The price of 60 to 70 yuan has been difficult for most cable manufacturers to maintain profits and threaten survival. However, more serious than this, the quality of the cable is also seriously declining. "Today's quality has been far less than that year, and the quality has dropped significantly." Lin Zhong, a professor at Beijing University of Posts and Telecommunications, tested the quality of almost all fiber optic cable manufacturers across the country and came to the conclusion. Obviously, quality problems have seriously affected corporate integrity and threatened cyber security.

Supply and demand determine the price to recall in 2001, when China's fiber optic cable demand was the most tight, the price of optical fiber also reached the highest peak in history due to imbalance in supply and demand. Of course, huge profits have also led to excessive expansion. At that time, China’s cable manufacturers reached 200, more than it is now, and overcapacity is a foregone conclusion. Subsequently, the optical communication crisis triggered by the bursting of the Internet bubble made most companies The dream of a fortune shattered.

In 2003, the optical communications market recovered, but the price of optical fiber was as weak as the stock market today. In 2009, 3G license issuing triggered a surge in demand for optical fiber. When the optical fiber was short of 10 million core kilometers, the optical fiber price rose to 90 yuan. However, if history repeats itself, the optical fiber production capacity will be surplus in 2010, and the price of optical fiber assembly and purchase will drop to 65 yuan. Although China’s optical fiber demand is close to 100 million core kilometers today, overall output still exceeds demand, and excess capacity will inevitably emerge.

"Overcapacity has caused the extreme instability of the optical fiber industry today." Lin Zhong summarized.

Collective mining performance quality issues If the company's own disorderly development led to price dives, then when is the quality problem?

"A lot of quality inspections show that the quality of the products of most domestic manufacturers is unqualified. This year's inspections by operators reflect many quality problems." A local operator expressed concern about the quality of optical cables in China.

According to Xue Chi, vice president of Zhongtian Technology, “Some manufacturers maliciously receive orders below the cost quotation, then cut corners in production and earn profits from it. The quality is bound to pass.” This phenomenon is considered by the industry as a source of confusion.

At the same time, operators do not pay attention to quality inspection during the collection and production, which leads to low-quality optical fiber cables that can be exploited to a large extent to condone the decline in quality. In response, the above-mentioned local operator said: "At present, the demand for optical fiber cable is very large, and manufacturers are easy to detect when using alternatives to get into trouble." In this regard, Lin believes that only operators to strengthen sampling, and third-party testing, severely punished Quality unqualified manufacturers, quality problems will be gradually resolved.

Mao Qian, chief engineer of the former Wuhan Institute of Posts and Telecommunications, also stated: "Only the operators will strengthen quality testing and the industry chain will soon return to normal."

"The situation of low quality and low price has occurred in foreign countries, but it will soon be curbed," said Zhou Zhongjun, deputy director of the Cable Commission. "First of all, below the cost quotation violates the tender law and is subject to legal sanctions; Secondly, foreign trade associations have the right to restrict corporate behavior and coordinate product prices, but the domestic countries that violate the law's quotations do not care, and industry associations do not bind the company."

Liu Hongfeng, director of the cable department of the Institute of Telecommunication Research of the Ministry of Industry and Information Technology, said: “This type of phenomenon is actually an inevitable result of industry competition. It is difficult for major cable manufacturers in China to jointly control industrial development.” Flight, transit, prosper, Fidelity optical fiber output over 80% of total domestic production.

He believes that several major manufacturers have similar output, similar strengths, and the same interests. The situation is like the six countries in the Warring States period. Although there are joint efforts between the Soviet Union and the Soviet Union, "all the forces that are evenly matched are rarely successful," and the conflict of interests has made the alliance difficult to accomplish.

Low prices and low quality are just like a whirlpool. Domestic manufacturers have gradually approached the center of the vortex in this kind of abnormal competition. Of course, manufacturers are also trying to turn the tide: Zhongtian and Fortis are setting up large-scale quality inspection centers and opening up to the outside world to ensure the stability of product quality. Qian Jianlin, General Manager of Hengtong Optoelectronics, is quite representative: “We will never participate in vicious competition at a critical moment, we can give up share, guarantee corporate profits, and maintain the long-term development of the industry.”