The Company designs, manufactures and markets a comprehensive line of test and measurement solutions for the global telecommunications industry.
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Global telecommunication industry has benefited in more ways than one with the various technological advances that has occurred in the communication industry in the past decade. Network testing and measurement is one area that grew the most as the network infrastructure moved from copper carriers to the present optic fiber based and is all set to embrace next generation copper based broadband network.
EXFO is one company, which has made its mark in the field of network testing and measurement in global telecom industry. The company has grown organically and inorganically over the years withstanding many adverse situations to become the third largest player in the field of optical and protocol testing. Of the $1.6bn market it controls approximately 12% market share.
The Telecom division, the core segment of the company contributed 83% of the total revenue for the three-month period ended November 2006 while the rest 17% from Life Science and Industrial division. During the same period revenue increased by 31% due to increased penetration of the Telecom division in Europe-Middle East-Africa (EMEA) market. EMEA combined with the U.S. market accounts for over 80% of the company’s revenue.
Fiber to the home (FTTH) roll out has accelerated over the years as a result of technological advances and market reforms. The U.S. has only 436,000 FTTH subscribers, a market which is growing at a rate of 215% per annum. This growth can be attributed to factors like maturing online video applications, drop in cost per subscriber from $4000 in 2000 to $300 (expected in 2007). Newer optical standards in the offing will make Video on Demand and High Definition T.V. a reality in the near future.
In the U.S., Verizon is the leading player in FTTH market and is the largest customer of EXFO. The company by acquiring Consultronics in January 2006 has entered the FTTH testing and measurement market in a big way. These factors along with net accepted orders of $37 million for the first quarter of 2007 positions the company at an advantage.