The pandemic accelerated growth for large tech and telecom players, while the surge in digital demand exposed a darker side of the global fiber optic economy. In recent months, shortages of key components and materials have driven up costs and threatened expansion plans as nations push to digitize. The question now is how Spain will fare amid these pressures.
Europe, alongside China and India, bears the sharpest impact from the fiber supply squeeze. Fiber usage has climbed to 70 percent from a low in early 2021, a shift noted in a Cru Group study that could complicate distribution and slow global connectivity.
On one side, experts link the shortage to a surge in demand driven by a boom in connectivity during the Covid period, with year over year growth surpassing 8 percent. On the other side, the industry faces a shortage of crucial manufacturing inputs such as helium and silicon tetrachloride, with prices for these materials rising by roughly 135 percent and 50 percent respectively. Inflation has also accelerated in the wake of the war in Ukraine. As Wendell Weeks, head of Corning, a leading fiber optic producer, put it, the current inflationary surge is unprecedented in his career.
And Spain?
This issue can disrupt markets where fiber coverage remains uneven, including parts of Greece, Belgium, Austria or Germany. In Spain the impact is more contained because the country has advanced digitization compared with its European peers. Spain ranks second in the continent for fiber penetration, with 68.4 percent of people having access, behind Iceland. It also leads in rural fiber reach and is among the fastest growing markets, according to reports compiled by the FTTH Council Europe, the industry federation. Active lines reached 13.2 million in May, according to data from the CNMC.
Fiber optics are pivotal for the digital transformation of societies and for powering an increasingly network reliant economy. The promise of 5G and the broader 5G ecosystem, enabling thousands of devices to stay connected simultaneously, sits at the core of Industry 4.0 built on digital architecture. Experts warn that while short-term challenges may be manageable, the medium term could bring higher costs that affect new fiber deployments, cautions José A. Lázaro, a professor at ETSETB in Barcelona.
Durability of telecom operators
Today, about 77.6 percent of Spain’s fiber lines are controlled by three major groups: Movistar, Orange, and Vodafone. The government has supported these operators with substantial funding to accelerate cabling and bring broadband to more corners of the country. The strategy has included phasing out the old copper network in favor of a more efficient fiber framework, a move that positions Spain strongly for the future.
Spain’s large telecoms often secure multi‑year supply contracts with fiber manufacturers, a practice that helps stabilize revenue through market ups and downs. Alberto Moreno, head of regulation at a national telephone company, notes that long-term, high-volume purchases help blunt inflationary effects. He adds that Orange deployments have remained resilient, thanks to supplier foresight, even as costs begin to tick higher.
Challenges for manufacturers
The pressure is sharpest on fiber optic producers facing rising energy, transport, and material costs. Ramón Alós, president of a leading manufacturer, points to the mismatch between rising prices and the ability to meet operator demand. Recent months have seen the price for fiber optics shift from around four euros per kilometer to about 6.70 euros.
Producers face another hurdle as long-term contracts priced at fixed rates are tested by rising costs. Customers who signed earlier commitments often resist price increases, especially when tenders are publicly funded. Alós warns that a sustained price rise could aggravate the situation further, calling the outlook difficult to navigate without new levers.
Throughout the landscape, industry observers emphasize that the path forward depends on balancing supply capacity with the escalating demand from operators and the broader push for faster digital networks. The narrative shows how strategic procurement, supplier relationships, and targeted policy measures can either cushion or amplify the effects of the current squeeze.