[Huicong Guangwang] The gradual advancement of the national “Twelfth Five-Year Plan” has brought new development opportunities to the optical communications industry. With the implementation of the “Broadband China” strategy, the issuance of domestic 4G licenses, the promotion of triple play, the rapid construction of smart grids, and the large-scale collection of 100G systems, the overall development of the optical communications industry is positive.

However, the development of the optical communication industry, on the one hand, has brought the market demand to a high level of growth; on the other hand, it has presented a situation of overcapacity in the whole industry, with both opportunities and challenges.

The positive impact of the national macro-policy on the development of the fiber optic cable industry has driven the industry's market capacity to expand, and industry-leading companies have further expanded their production scale. At the same time, they have also attracted new competitors to enter the cable industry. The competition in the industry is increasingly fierce. The main customers of fiber optic cable manufacturers are telecommunications and power operators, including China Mobile, China Telecom and State Grid Corporation, China Southern Power Grid Corporation, and customer concentration. Operators mainly use centralized bidding. In recent years, bid prices have continued to fall. Industry profit margins continue to shrink.

China's communication cable industry is fully open to the industry. Enterprises have rapidly expanded their production in order to seize the market. The communication cable has been overcapacity in the whole industry chain. The competition for homogenization of common products is fierce, and the price of products, especially the price of optical fiber, is declining. The overall profit margin showed a downward trend. Industry competition has changed from order competition before 4G in 2013 to competition for cost, capacity and overall strength and strategic layout of the industry chain.

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