China mobile looking to spend money towards 5G network expansion - Let’s see if OFC demand picks up :
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What would be the impact of government hiking duty on optical fibre from 10 to 15 %?
Do they have production in China?
Ofcourse. China is the largest consumer of Optical fibre. Reason why Stock price of Sterlite collapsed when china telecom got its OF tender at a cheaper price.
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Q1 -2019-20 Conference Call
https://finance.yahoo.com/news/edited-transcript-strtech-nse-earnings-210632666.html
Why hasn’t Sterlite uploaded Jun 19 Shareholding pattern?
Eager to see pledge status in actual shareholding filings…
Shareholding pattern announced for the period ended Jun 2019.
https://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=532374&qtrid=102.00
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Global 5G deployment is one the the key triggers for OFC prices to move back up.
China’s 5G deployment will be key to restore the current demand supply imbalance in the world OF/OFC market.
The video below gives some perspective of what’s coming in china.
Note: Video seems to be a sponsored video from Huawei.
Disc: Invested.
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The stock seems to be falling every other day. A massive fall today. It seems to me that although the data , figures and the business is conducive for Sterlite to grow, there is something that is dragging the stock down. My initial research does not throw any light on what could be the probable reasons?
There has been media reports that Co is planning to buy assets of Rcom. I believe this is the reason for the steep fall. However the co has submitted clarification stating that the news is false… seems like prices is unnecessary being dragged.
Shift from 3G/4G would require 100X more fibre. Is there enough global capacity to address this massive increase expected in fibre demand?
Slide from Cornings investor day presentation in June 2019
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@amey153,
Thank you for the very illustrative post. I’m still holding on to Sterlite at a considerable (60%) loss. I’m reminded of Graham’s teachings on how to fail fast with stop loss, but also feel you may have sold at the bottom (~105 ?).
While I think super-profit days in Sterlite (from 2016-2018) are gone, because of it’s forward integration I see it becoming more a value stock with perhaps some uptick when 5G happens a few years down the line. We should only hope that whenever 5G investment happens in India, we don’t end up importing the left-over production from China after they’ve exhausted 5G deployments.
Note: Our 4G speeds (~10Mbps) are still lagging world-wide benchmarks (30-50 Mbps).
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But 5G use cases are not required for India, those are mostly for Developed world like autonomous cars or even IIoT… about speed its not technology but how you use technology give you speed, 4G can support more than 10 Mbps, but we need more capacity which need more money to provide better BW, so same in the case of 5G it will give almost same speed as at ~200 ARPU you can not offer 100 Mbps…So 5G does not make any sense to India and 5G will be even on higher frequencies that again an issue, so 4G is enough for our current needs and I dont see anybody in India has even Money to invest in 5G, be it Vodafone-Idea, Airtel or even JIO, as most of them are not making money and where they will get money to further investment…
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The key to answering the above questions lies in collecting, interpreting and taking into account data points other than the ones obtained from the company management.
My article is just an attempt to present data collected from various other sources.
The data coming in from YOFC, Corning and others does not paint a very rosy picture of the demand-supply situation (over-supply is evident) and consequent effect on product pricing.
Excess supply/price reductions will have to start reflecting in the numbers reported by optical fiber players across the globe.