'Multiple' Carriers Delayed 5G Buildouts to 2020, Says Corning
Corning’s “fiber densification” for 5G wireless “has not yet gained momentum outside the early leaders,” prompting Corning to downgrade the 2019 sales forecast for its optical-fiber business, said Chief Financial Officer Tony Tripeny on a Q2 earnings call Tuesday. “Several…
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large build projects we projected for the second half of the year have been pushed out” to 2020, he said. “Multiple carriers have reduced” capital expenditures “for the remainder of the year.” Corning entered 2019 expecting the global optical-fiber market to grow by 5 percent or more, and Corning’s sales to increase “in the low teens,” said Tripeny. “We now believe the global market will be down by the mid to high single digits, and that our sales will be up by the low to mid single digits.” But the company is “increasingly confident of our long-term projections” on the 5G buildout,” said CEO Wendell Weeks. “These are significant capital projects. Our customers need to get themselves organized, make the decision and then begin to make those investments. In that, timing can be difficult to call.” Corning is seeing that “people are waiting a little bit” on 5G, said Weeks. “There’s sort of a little gap between projects, other than the sort of real leaders in 5G. They’re putting their plans together, they’re getting their financing house in order and getting their alliances in place.” Weeks thinks “the good news here, this isn’t going to be subtle, as our customers announce and decide they’re going to roll, and how they’re going to roll, in 5G,” he said. Ultimately, in 5G, “demand will follow, and we’ll have a hard time keeping up,” he said. Corning hasn’t “really started to feel the big oomph from the wireless networks of the world changing from relatively fiber-poor to very fiber-rich” with 5G, said Weeks. “That’s all ahead of us.”