Connectivity had been having a moment through the pandemic, but the urgent need for high-performance interconnection has rolled back a bit and fiber optic networks and the markets around them are showing the effects of that change. Kagan analysts Natalie Colakides and Mohammed Hamza join host Eric Hanselman to look at what’s going on in fiber markets. While backbone business is solid, investments in last mile build out, the connections to homes, has slowed. As nations look to address the digital divide, the gap between the well and less connected, they’re having to push harder and invest more. The density of urban environments allowed greater scale, but rural fiber is more expensive to build per subscriber, given the lower density. At the same time, urban take up rates, the percentage of subscription to available services, are much higher than rural rates. It could be caused by rural often being served by brands that are less well known. More effective marketing could also be a key to accelerating fiber markets, but it will have to overcome latent friction in changing from existing services. With advances in digital homes, consumers will need more bandwidth eventually, but the question is when greater numbers of services and devices will drive them to upgrade. The stall in the current market has led to some consolidation-driven M&A and more may occur opportunistically. Growth is in the future, the only question is when it will happen.

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Credits:

• Host/Author: Eric Hanselman
• Guests: Mohammed Hamza, Natalie Colakides
• Producer/Editor: Valentino Alfred
• Published With Assistance From: Sophie Carr, Kyra Smith