Market Convergence Means Opportunity

While the general market outlook for unshielded twisted-pair (UTP) and coax cable is flat, certain segments will jump this year. “Overall market growth will be in the lower single-digit area,” said Bill Miller, director of marketing for Belden Electronics Division. “However, contractors will see a big increase in the amount of Cat. 6 installed.”

Look for a 30 to 40 percent sales increase in 2003, a figure that might be light. “Our company is running a bit ahead of that,” Miller said.

Most Category 6 will be sold for new installations, not upgrades. Credit the boomlet to the June 2002 standard ratification. Even though a lot of Category 6 UTP sold before the paper was finalized, having a “real” standard gives contractors and integrators a solid stance when recommending cable. “In terms of new project business, we figure Cat. 6 will be 85 percent of new business spec’d in 2003,” said Pete Newman, of Leviton Voice and Data.

Some observers feel the growth in Category 6 will come at the expense of Category 5e. Since an average network infrastructure lasts from seven to 12 years, customers want to get it right the first time. Pulling new cable can run 150 to 250 percent of the original installation cost. Newman believes Category 5e will hang on strong, and “get the majority of volume due to the huge imbedded base of installations.”

On to Category 7

With labels for Category 6 cable barely printed, when can we look for Category 7? Not soon. Today, Cat. 7 is more like Kitten 7.

“Cat. 6 won’t be another Cat. 4 where it was here and gone in six months,” said Tom Russell, a vice president of Quabbin Wire & Cable. He said the next generation is a good three to five years away. Belden’s Miller agrees that Category 7 is mostly theory. Quabbin’s chief engineer, Jim Rivernider, presented a formal proposal at the October TIA meeting and received some support from other cable companies, premises hardware makers and test equipment companies. An informal study group within TR-42.7 has been formed and first reports will be made at the next TIA meeting. That group will do channel measurements, some modeling and report the results to committee.

Don’t confuse the shielded European Category 7 with the proposed U.S. version, which would retain the modular plug interface and the stranded 24-gauge UTP cable used today. Everything will likely be backward-compatible with Category 6 and 5e. However, where today’s Category 6 is about 23 gauge, the new Category 7 horizontal cable would be thicker.

The European version offers optimization for cross-talk noise, but not much attenuation improvement. The proposed U.S. version is based on the idea that faster signaling schemes will need significant attenuation improvement to work on copper cabling.

Before worrying about Category 7, contractors should ask whether local area network chip manufacturers can do something with its presumed benefits. That answer should be “yes.”

Stretching coax’s life

The coax market got a breath of new life following the recent heightened security scares. Many buyers want to expand their security-camera networks. Eventually, CCTV and security cameras will converge on UTP.

“Baseband coax with solid-center copper conductors will continue to be strong with the growing security demands,” said Miller. “I don’t see a decline in coax next year.” That’s because demand growth will offset coax concerns. In a few years, that may change as UTP eats into the coax market.

Newman also sees a continued move away from coax to IP-enabled cameras on UTP, except for use in schools and conference rooms. He even sees advantages to using existing cable for security.

Market opportunities

Commercial electricians might consider migrating their low-voltage services into the residential market. The multitenant unit (MTU) business is growing much faster than commercial markets. Researchers predict 25 to 40 percent compounded annual growth rate for MTU network installations over the next five years. While the upper end looks optimistic, there are few market spaces that will meet the growth expectations.

Commercial contractors will be asked to bundle services and to integrate offerings. In the current economy, this could create friction between the manufacturer, distributor and contracting partners. The market will have to settle on equitable practices here.

Newman strongly recommends getting trained by vendors. “Cat. 6 is a lot more sensitive. It’s larger-gauge cable and fussier in terms of untwisting,” he said. “You really have to know how to install it.” Belden’s Miller said,“I think savvy end-users will begin to look at the financial status of manufacturers and contractors.”

Rationalization hasn’t yet occurred in this market, but it’s coming. Companies with rocky balance sheets will come under the gun, and others will need to see which firms will be doing business over the long haul. EC


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