10 questions for Maarten Verbunt on geopolitics, scarcity, and increasing pressure on the fiber optic market

Maarten Verbunt is Managing Director and founder of Maunt, and has been active in the fiber optic industry for over 25 years. Through his daily involvement with international manufacturers and large-scale projects, he has a sharp view of market developments and the impact of geopolitical shifts on availability, pricing, and strategy.

Question 1: Maarten, can you walk us through what is currently driving the sharp increase in demand for fiber optics?

Absolutely. What we are currently seeing is an unprecedented increase in demand for fiber optics. This is largely driven by the rise of AI and hyperscale data centers in the United States, from companies such as Microsoft and AWS (Amazon). These players are building new infrastructure on an enormous scale, and that simply requires far more fiber than traditional data centers. While a classic data center also uses fiber optics, AI-driven environments require up to 10 to 30 times more fiber. This is mainly due to internal connectivity between racks, clusters, and buildings. As a result, manufacturers are currently struggling to keep up with production capacity. In some cases, inventory for the coming years has already been largely allocated.

Question 2: Is this shortage solely the result of demand from data centers, or are there other factors at play?

No, certainly not. That demand is an important driver, but there is much more going on. What we are seeing is that fiber optics have become a strategic component in geopolitical conflicts. In the war in Ukraine, as well as in the Middle East, fiber is increasingly used for military applications, such as controlling drones. This means that part of the production capacity is shifting toward defense-related applications, which puts additional pressure on the commercial market. On top of that, supply chains are under strain due to geopolitical tensions. Transport routes are less stable, some routes are avoided, and lead times are increasing.

Question 3: You already mentioned the Middle East. What concrete impact is the current unrest there having on your market?

The impact is essentially twofold. On the one hand, there are disruptions in logistics and transport—routes becoming less accessible or more expensive due to increased risks. On the other hand, there is an indirect effect through energy prices. Tensions in the Middle East are driving up oil prices. Oil is a key raw material for plastics such as polyethylene (PE), which is used in ducts, pipes, and cable sheathing. This means that not only fiber itself is becoming more expensive and scarce, but also everything around it, the entire infrastructure required to build fiber networks. As a result, project costs are rising across the board.

Question 4: What does this mean in practice for customers and projects?

For customers, it mainly means longer lead times, higher prices, and less predictability. Projects that used to be tightly scheduled are now facing uncertainties in material availability. In addition, there are regional differences. Europe, for example, is relatively dependent on imports and is therefore more sensitive to price increases and shortages. For companies like Maunt, this means you have to plan much more proactively, improve forecasting, and collaborate more closely with both customers and manufacturers to secure capacity.

Question 5: Do you expect this situation to be temporary, or is this the ‘new normal’?

That’s difficult to say at this point. Demand for fiber will continue to grow structurally, not only due to data centers, but also due to further digitalization, 5G, smart cities, and industrial applications. At the same time, geopolitics has become a permanent factor in supply chains. This means that scarcity, price volatility, and strategic dependencies will continue to play a larger role.

Question 6: What is your main advice for companies that depend on fiber infrastructure?

My main advice is: move from reactive to strategic procurement. Don’t wait until you need materials but think ahead. Build strong partnerships with suppliers, work with long-term planning, and be willing to make commitments to secure capacity. It’s also important to build flexibility into your projects. One thing is certain: the market is not going to become more stable in the coming years, if anything, it will become more complex.

Question 7: Can you elaborate a bit more on the pricing structure of fiber itself? Why are prices rising so sharply now?

Certainly. What many people don’t realize is that “bare” fiber has historically been a relatively inexpensive component. If you look at the most common type of fiber, the price has long been roughly between $3 and $5 per fiber kilometer. What we are seeing now is that this price is rising significantly. In the current market, we increasingly hear prices moving toward $10 to even $15 per fiber kilometer (or even higher). That may still seem low, but the impact is enormous—especially for cables with high fiber counts. Take, for example, a cable with 96 fibers. Each fiber has its own individual price increase, which directly multiplies in the total cost of the cable. As a result, the per-meter price of such cables has increased substantially, often by 25% to even 50%. A key factor here is the price of the raw material germanium, which is used in the fiber production process to improve light transmission. This puts pressure on the cost of preforms (the base of fiber optics), which directly translates into higher prices for the final fiber optic cable.

Question 8: What do these developments mean specifically for markets such as the Netherlands, Belgium, and Germany?

Apart from price increases, I expect availability and lead times to have the greatest impact in these markets. This directly affects the rollout of fiber networks. In data centers, the ratio between materials and installation is relatively balanced, but in underground infrastructure it is very different. There, fiber typically accounts for around 10 to 15% of the total cost per civil meter. But even if it’s a relatively small component, the rule is simple: if you don’t have it, you can’t build a network. So availability becomes a critical factor.

Question 9: What should companies concretely do to anticipate this and safeguard their projects?

As mentioned earlier, companies need to think much further ahead. Carefully assess current lead times, pricing, and your project pipeline. Engage actively with suppliers and consider building buffers to keep your supply chain running. Especially since I expect prices to continue rising, what seems expensive today may be even more expensive in a few months. In addition, transport from Asia is becoming increasingly complex. Due to tensions in the Middle East, routes are disrupted, ships are taking detours, and fuel costs are rising. This directly translates into higher logistics costs and longer lead times. In short: think strategically ahead, both in terms of price and availability, and focus on the medium and long term.

Question 10: Looking ahead to the next 3 to 5 years, how do you expect the fiber optic market to develop?

I believe manufacturers are definitely anticipating the current situation. I have personally spoken with more than ten major global fiber manufacturers, and it is clear that several of them are expanding their production capacity. At the moment, there is a global shortage of roughly 100 to 150 million fiber kilometers relative to demand. Manufacturers are working to close that gap, but it takes time. Once that additional capacity becomes available, I expect prices to stabilize or even decline somewhat. Demand may also decrease over time as large hyperscale data centers complete their construction phases. Geopolitics will also play a major role. I understand that applications such as drones currently consume around 10% of global fiber capacity. If demand for those applications decreases due to stabilization in conflicts, that will have a direct impact on the market. But realistically, this will not be resolved overnight. Considering the duration of current conflicts and the time required to scale up production capacity, I expect to see continued impact this year and next year. I can’t predict the future, but my sense is that market pressure will persist for the time being. We are clearly in a period where everything is still moving upward, and I don’t see that changing in the short term.