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Network Infrastructure Magazine | Thursday, June 30, 2022
Lack of gas is jeopardizing the rollout of networks in the UK and other nations with high broadband ambitions when coupled with rising shipping costs and the price of other raw materials.
FREMONT, CA: A vast majority of the people are familiar with helium as the gas used to inflate aerial party balloons that make even the manliest voice funny shrill when inhaled. Few of them are aware of how crucial it is as a raw material for producing glass fibre, the latest broadband networks' substitute for copper. An important component of the ultrafast upgrading is the gas, which, appropriately enough, may make the deepest baritone seem like a high-speed replay. Without it, millions of homes would be forced to give up advanced services like Netflix in ultra-high definition, online multiplayer gaming, and other cutting-edge offerings that satisfy their daily Internet appetites. A major concern is the scarcity of helium, as well as other raw materials. Unfortunately, the situation is getting worse since last year. Since Russia invaded Ukraine in late February, European nations have been looking for gas suppliers outside Russia, the second-largest producer in the world after the United States. A project called Nord Stream 2 to transport Russian gas through Germany is in limbo and is most likely doomed. The dictator of Russia, Vladimir Putin, controls the gas pipelines and has threatened to sever ties with nations that provide Ukraine with arms. The spot price of natural gas was USD 3.26 per million British thermal units when the White House released its report. It crossed USD 8.14 last month.
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It is jeopardizing the rollout of networks in the UK and other nations with high broadband ambitions when coupled with rising shipping costs and the price of other raw materials. Helium is a crucial component used in the production of glass and fibre, which affects activities around the world. Companies are currently discussing raising pricing with other significant clients due to supply restrictions and rising costs. Customers in Europe and the US are showing strong support for the cost hikes in this range, which have increased the cost of fibre and cable in the UK market by 20 to 25 per cent.
Numerous factors contribute to the high-cost inflation, and businesses that manufacture fibre-optic cable also use polyethene as a raw material. Polyethene is derived from crude oil, much like helium comes from natural gas. This is closely based on the index of the price of crude oil. According to the US Energy Information Administration, the cost of a barrel of crude oil in the US increased from USD 68.58 to USD 107.12 between June 2021 and March this year.
Therefore, it should come as no surprise that transportation costs have likewise been growing like a balloon filled with helium. Container prices have more than quadrupled since two years ago for most goods going out of India to Europe and the UK. Because of the existing supply constraints, lead times for consumers are substantially increasing. The most recent lead times for Europe are estimated to be between 12 and 15 weeks, while those for the US are between 50 and 60 weeks. US lead times have climbed from 30 per cent to 40 per cent during the past six months. The lack of optical fibre is getting worse, which could cause delays in US and European broadband deployments, particularly goals for rural access.
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