Sterlite Technologies expects growth in sales volume to return next fiscal

We do see some inventory build-up in North America. We do expect probably another six to nine months for that inventory to reduce and then the demand to come back, Company's MD said

Broadband gear maker Sterlite Technologies expects optical business sales volume in the US to decline this fiscal due to inventory build-up and growth to return in the next fiscal, Managing Director Ankit Agrawal said.

Speaking to PTI at the India Mobile Congress, Agrawal said that the company has about 20 per cent market share in Europe and between 10 to 12 per cent market share in the US.

"We do see some inventory build-up in North America. We do expect probably another six to nine months for that inventory to reduce and then the demand to come back. Overall for this year, we do expect some volume decline. And probably from next year onwards, the volumes will come back," Agrawal said.

 

STL in the September 2023 quarter posted a 20 per cent decline in consolidated profit at Rs 32 crore.

Overall, the company has projected a dip in revenue during the current fiscal year but expects increased sales in EMEA (Europe, Middle East and Africa), India and Asia Pacific markets to fill the short-term volume gap from the North America market.

The company in September opened up an optical fibre cable manufacturing plant with an investment of about USD 56 million.

STL at present has close to 50 million optical fibre kilometers production capacity and about 42,000 route kilometers optical fibre cable capacity.

The company at the India Mobile Congress unveiled the world's slimmest optical fibre for telecommunications with thickness of 160-micron optical fibre to cash on growth in 5G networks and data centres.

"When we look at the India market for example, 5G subscribers are around 100 million at present and are expected to grow to 700 million very soon. This will require a huge amount of fibre networks to be built out across our cities. We need to improve the speed of deployment and increase the capacity of the fibre itself by reducing the diameter of the fibre itself and the cables so that you can pack a lot more of the fibre especially in the cities within the same duct space," Agrawal said.

He said cable made with STL's 160-micron fibre can pack 3 times more capacity than traditional 250-micron fibre.

"We are very confident that as we produce more of these solutions, telecom operators, government and projects like BharatNet will find a lot of use case for these projects," Agrawal said.

Laying ducts account for around 60 per cent of the entire fibre deployment cost, making duct space a precious asset. Network builders all over the globe are in a continued quest to reduce fibre size to pack in more and more capacity in the available duct space.

According to STL, in a large-scale project like BharatNet, India needs to deploy about 20 million fibre kilometres cable by 2025.

The firm estimates that using 160-micron fibre instead of the standard 250-micron fibre can potentially reduce the deployment time by about 15 per cent, which will in turn reduce the plastic footprint by about 30 per cent.