Over the past six months, the rapid and dynamic rise in optical fiber prices has made operator cable tenders a challenging endeavor.
Following China Telecom's cancellation of its previous annual tender, provincial subsidiaries have been relying on sporadic, smaller-scale procurements as a stopgap measure.
In May of this year, China Telecom initiated a new group-level tender, though it did not publicly disclose the procurement scale.
Recently, CHINA MOBILE officially launched its tender for standard optical cables for the 2026-2027 period, with a volume of approximately 2.1618 million sheath kilometers, equivalent to 69.222 million fiber kilometers.
This represents the largest single cable procurement this year, with a requirement fulfillment period of 9 months following the announcement of the tender results.
Unlike in previous years, this tender for standard optical cables is notably secretive, as CHINA MOBILE has not publicly disclosed either a maximum bid price or the corresponding share allocations.
Furthermore, it has set an unusually wide range of 6 to 18 winning bidders, injecting significant uncertainty into the procurement process.
Understanding the 30% Volume Reduction
Historically, CHINA MOBILE has been a major consumer of optical cables, conducting annual tenders often valued in the billions.
However, starting in 2022, as deployments of 5G and gigabit broadband networks matured, the company's capital expenditures have declined year after year.
Its investment structure has undergone a fundamental shift, with a new focus on areas like computing power and AI, leading to a gradual decrease in demand for optical cables.
Also in 2022, CHINA MOBILE did not conduct a tender for standard optical cables.
It procured 108.2 million fiber kilometers in 2023, paused again in 2024, procured 98.84 million fiber kilometers in 2025, and now 69.222 million fiber kilometers for 2026, showing a clear and consistent downward trend.
Independent market research firm CRU has repeatedly stated that demand from Chinese operators remains weak.
Public data shows that CHINA MOBILE's overall capital expenditure for 2026 fell by 9.5% year-over-year, with capital expenditure for communication networks dropping by 20.3%.
Therefore, a reduction in this year's tender volume compared to 2025 is entirely logical.
However, preliminary calculations suggest this year's procurement volume has decreased by nearly 30% compared to last year, the largest drop in recent years.
Industry voices suggest the significant reduction in procurement scale this year is also influenced by price factors.
Amid the boom in AI infrastructure construction, data centers have seen a surge in demand for specialty fibers like G.657.A2 and multimode fiber.
Fiber and cable manufacturers are actively adjusting their production capacity layouts, which has somewhat squeezed the capacity for G.652.D fiber, driving up its price.
CRU data indicates that in March 2026, the price for Chinese G.652.D bare fiber reached RMB 83.40 per fiber-kilometer, a year-over-year increase exceeding 400%.
Considering the results of CHINA MOBILE's 2025 tender, CRU estimated the implied fiber price at RMB 18.85 per fiber-kilometer (including tax).
Typically, operators have budget constraints for investments in each sector.
The reduced scale of CHINA MOBILE's current tender can be seen as a volume-cutting measure in response to the ongoing surge in fiber prices.
The Strategic Implications of 6-18 Winning Bidders
In past years, the number of winning bidders in CHINA MOBILE's standard cable tenders has been 13-14, with the top four securing the majority of the share, aligning with the "Big Four" structure of the Chinese fiber market.
This time, the range of 6 to 18 winning bidders creates a vastly different dynamic.
A lower number of winners would mean more concentrated shares, allowing individual suppliers to secure larger portions.
Conversely, a higher number would lead to more dispersed shares.
This presents significant strategic maneuvering room for potential bidding suppliers.
This rule change likely incorporated feedback from multiple parties.
On May 28th of this year, to further implement its supply chain management center's requirements for transparent procurement and fully solicit opinions from potential suppliers, CHINA MOBILE held a technical discussion meeting for the standard optical cable tender, notifying each potential supplier to arrange for one technical and one commercial representative to attend.
Industry insiders point out that this new bidding rule is closely related to the current continuous rise in fiber prices.
Currently, only a minority of domestic manufacturers possess the full "preform-fiber-cable" industrial chain.
Most small and medium-sized, long-tail cable factories need to purchase preforms to draw fiber or buy fiber to produce cable, meaning they bear higher costs.
If fiber prices continue to rise, they may face situations where they cannot fulfill orders.
From this perspective, CHINA MOBILE likely adopted this strategy out of consideration for future supply stability.
It aims to allow leading manufacturers to secure larger shares while also introducing more competitors to gain greater pricing leverage.
Looking at emergency tenders by China Telecom's provincial companies over the past six months, winners have almost exclusively been leading enterprises.
Fostering a Healthy Supply Ecosystem
As mentioned, CHINA MOBILE is a major consumer, and its final tender price serves as a crucial benchmark for the fiber and cable industry, influencing the procurement patterns of other operators.
However, judging from China Telecom's practices, the maximum bid price for "GYTA-single-mode G.652D-24 core" outdoor cable (excluding tax) is generally around RMB 2,500 per sheath-kilometer.
Factoring in labor, other raw material costs, and other production expenses, this price already appears to be a result of fully respecting market dynamics.
Of course, while operators are actively working to establish fair tender pricing mechanisms, fiber and cable manufacturers should also demonstrate good faith.
Data from the National Bureau of Statistics shows that as of May 2026, China's cumulative optical cable output had fallen by 9.5%, a figure seemingly at odds with the currently hot market.
One reason could be that data center cable production is more complex with lower yields.
Data indicates the drawing efficiency for G.657.A2 fiber is 10%-15% lower than for G.652.D, requiring more preform capacity for the same length, which could explain the decline in cable output.
Another reason might be significant fiber exports, drastically reducing the fiber available for domestic cable production.
CITIC Securities previously released a report stating that in February, China exported approximately 25.2 million fiber-kilometers of fiber, accounting for about 65% of the country's monthly effective fiber output.
In April, the institution noted that around 80% or even more of domestic monthly fiber output might now be for export, significantly reducing the proportion available for operator procurement.
It is widely recognized that global fiber demand has fully shifted towards being driven by AI computing centers.
CRU states that from 2025 to 2030, the compound annual growth rate (CAGR) for fiber demand from the telecom market is projected at 2.47%, while demand from AI computing centers is expected to reach a CAGR of 20.74%.
Manufacturers pursuing high-margin products is understandable and a necessary foundation for business survival and growth.
However, providing operators with highly reliable fiber and cable products to support the development of a strong network and digital China also holds profound significance.
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