2021 Fiber Optic Cable Centralized Procurement

In 2021, China Mobile led a major centralized procurement of fiber optic cables, scaling up both volume and pricing, with 14 companies winning bids, marking a strong rebound for the optical fiber industry.

China Mobile's Centralized Procurement

China Mobile officially launched its 2021 centralized procurement of common optical cables on September 8, 2021, with an estimated procurement scale of 4,470,500 km of cable (143.2 million KMF), representing a 20% increase from 2020 and a 36% increase from 2019 . The upper limit of the bid price was set at 9.86 billion yuan, 20% higher than the 2020 limit, reflecting stabilized prices after previous declines . By October 12, 2021, China Mobile announced the successful bidders, which included YOFC, SEFC, HTGD, ZTT, and FiberHome, among others, totaling 14 companies . The procurement prices for ordinary optic cables rose to over CNY 60 per core kilometer, a 50% increase from the previous year, signaling a "V-shaped" rebound to pre-2019 levels . This increase was partly due to rising raw material costs, which the adjusted bidding rules helped offset, ensuring profitability for fiber enterprises and supporting 5G infrastructure development .

Other Centralized Procurement Initiatives

In addition to China Mobile, other large-scale procurement projects occurred in 2021. For example, YOFC won bids for the State Grid Corporation of China's power transmission and transformation projects, including OPGW optical cables used in high-voltage transmission systems, which combine communication and ground wire functions . These projects supported the expansion of integrated broadband and digital power communication networks.

Market Context and Trends

The global fiber optic cable market was recovering from the COVID-19 impact in 2020, with expected growth at a CAGR of 7% through 2024 . In China, the cumulative optical fiber cable output in the first half of 2021 reached 144.6 million core kilometers, a 5.9% year-on-year increase . Centralized procurement by major operators like China Mobile played a key role in stabilizing supply, supporting infrastructure projects, and boosting industry confidence.

Implications

The 2021 centralized procurement initiatives:

• Increased procurement volumes and prices, providing a financial boost to fiber optic manufacturers .
• Ensured supply for 5G and digital infrastructure projects, aligning with national development plans .
• Encouraged competition among major suppliers, while adjusting bidding rules to balance profitability and market stability .
• Supported integration of fiber optic technology in power transmission networks, enhancing communication and operational efficiency . Overall, 2021 marked a significant recovery and growth period for the fiber optic cable industry, driven by centralized procurement strategies and infrastructure expansion.