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Dark Fiber Technology and its Business Importance

Dark fiber means the unused fiber optic cables from a network service provider. Dark fiber refers to those fiber-optic cables that have already been put either in underground conduits or on aerial utility transmission facilities but that have not yet been “lit”. Being lit means that, the original owner is providing all the equipment’s and the network is ready for use by any industry. In the Dark Fiber leasing the fiber installation and controlling is not done by the traditional network providing companies. The terms dark fiber is used because the optical electronics equipment’s needed to transmit information over significant distances are not provided by the owner companies.

 

 

The driving force for the demand of “Dark Fiber” domain is the availability of the assets, economic demand, and the advancement in technology. Large chunks of fiber optic cables are already running beneath the nation’s major areas. Dark fiber is capable of providing tremendous benefits to the organizations which set up near the existing cables. It provides substantial cost savings over lit services.

 

In dark fiber, the leasing is much cheaper, as only the unused fiber is provided, which contributes to a lower CAPEX. Dark fiber provides strong ROI for companies which use a substantial amount of bandwidth. Some examples of such companies in are SIPARTECH, Microscan, and R K Infratel.

 

The presence of fiber optics layouts provides a very high level of physical security. In the public access telecom domain, there are a large number of access points at various terminals and intermediate nodes across the network. But the dark fiber connection points or routes are only accessible at the endpoints of the optical fiber layouts. As the network access points are limited, the potential for unwanted external interference is removed, so the requirements for additional firewalls or security measures are reduced. Leasing a dark fiber route also ensures that an organization retains control over its network.

 

Tight security makes dark fiber an ideal option for those who regularly deal with sensitive information, such as healthcare organizations and financial institutions.

 

When a company leases dark fiber, it has complete control over it. They are the sole user for the leased dark fiber. This removes the inconveniently caused scheduled maintenance, costly service upgrades or long waits for capacity increases. The current wireless networks are always experiencing the performance issues. Many high data speed demand companies do not trust the wireless networks even in backup situations. In case of any failure in wireless networks, it is very hard to detect the site causing problem which make it costly to solve the problem. With dark fiber, the fault can be easily removed, reducing the maintenance and relaunching cost. Reliance Jio Infocomm could become the first service provider in the country to lease dark fiber from the government’s BharatNet initiative. Reliance Jio plans to start bidding aggressively for government connectivity projects in rural areas. They have realized that the next target segment is the rural segment. The connectivity is just 56.91% in rural communities. So a large segment is waiting to be exploited. There is always the risk of generating a very low return on investment, but Rjio with its infrastructure can overcome this and turn this opportunity in their favour.
 

-VIKAS KUMAR (Systems & Finance)

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4 comments

  1. Avatar
    Sagar Nihalani

    All said, this only lists the benefits for the company leasing Dark Fiber. In today’s market, next to 0 dark fiber is up for grabs in the city limits where it is actually required. Due to this all the service providers have to lay their own cables & to cut down on the costs they prefer overhead laying. In the regions where dark fiber is available for leasing, the asking cost is so low that companies who have dark fiber prefer to get service provider license & lease out Bandwidth instead of dark fiber. Also the ground challenges to lease out individual fibers from a cable is huge. Limited entry & exit points can be provided to service provider to connect their equipment. Also if cable is cut, then downtime is higher as no redundant path is available. Due to these factors, dark fiber is currently not a feasible business model for infra players. The way to make it profitable is if various Municipal bodies lay Dark Fiber through every street of the city at its own cost or through PPP. This way there won’t be RoW issues & also Services Providers won’t need to lay their own cables as fiber will be available at every corner of the city.

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      Thank you for your valuable ensight on the topic! I will research more on the provided points!

  2. Avatar

    I totally agree with Sagar’s point and would also like to suggest Vikas that why businesses are hesitant for this technology is mainly because it involves lot of CAPEX & OPEX from both service providers and leasers. Thus more PPP initiatives by government bodies like BSNL, MTNL, RailTel etc. can contribute their fiber lines for an auctioned bid along with making right amount of use of USOF. These initiatives can only be encouraged when public welfare is put forth to enhance teledensity. Private players shy away because of low RoI and low market value. Hence PPP can be sorted as the only island of hope for a growing India.

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