Nikolay Khorkov, a technological entrepreneur, played a crucial role in the explosive growth of telecommunications networks in the CIS. In the early 2000s, his technology made it possible to provide high-speed Internet to a significant number of Moscow residents. Today, his company Fibertool is the largest supplier of fiber-optic equipment in the CIS, with clients such as Rostelecom, Tele2, MTS, Megafon, and Beeline. In this article, Nikolay shares his insights on how he created a mass production of fiber-optic equipment and the future problems his developments will solve.
In the early 2000s, access to the internet in Russia was limited and mostly based on telephone lines. How did you make the internet more accessible?
I became interested in this topic in the 1990s when the Fidonet network emerged in Russia. I was one of the first to connect to it, which was an interactive forum where technology and science-related issues were discussed. At the time, I realized that the internet would change the world.
When the Internet came to the Moscow International Telephone Station (MMTS-9), the "modem dial-up" technology was used to connect users. A user connected a modem to a phone number and called a provider to connect to the internet. The provider, in turn, was connected to MMTS-9 and shared the connection speed among all users.
In the early 2000s, after college, I started a company that provided internet services in Moscow. I developed a technology that made it possible to distribute the internet without cables through the air, using radio relay stations. I negotiated with business centers and institutions to install these stations, which significantly reduced the cost for customers to connect to the network. If we had run cables from MMTS-9 through half the city, the budget would have been huge. At the time, only wealthy organizations or big banks with large databases could afford to connect by cable.
- How did you come up with the idea of launching fiber optic equipment?
- Previously, users mostly used copper cables to access the internet. Using the cables had substantial limitations of the signal transmission. If someone was far away from the connection center, they needed to install intermediate points of signal amplification every 100 meters, which increased the connection cost and reduced the system's reliability
When searching for alternatives, we discovered fiber optic technology. However, laying this cable required a special device - a fiber optic splicer - which was incredibly expensive and could only be purchased from Japan and delivered within 5-6 months.
We began researching the market and discovered a cluster of manufacturers of such equipment emerging in China. I traveled on a business trip to visit the leading companies, and as a result, we agreed to produce our own products based on the capacity of several factories in China and South Korea. Our partners were interested in producing equipment for the Russian market as it would be operated in very different climatic conditions, up to strong winds and temperatures of -47 degrees. We have integrated our R&D developments into partner prototypes.
Over time, the number of products we supplied to our customers increased, leading us to conclude that it was necessary to organize production in Russia. I brought the technology, recruited employees, and began training them. Eventually, in 2006, I set up mass production of passive components for networking - cables, patch cords, adapters, network cabinets, etc.
At the same time, we continued to produce splicers in China and South Korea, as electronic production is well-developed in these countries, and the delivery of chips to Russia could take more than six months.
Today, Fibertool is the largest manufacturer of fiber optic splicers in the CIS and occupies about 60% of the market. We reached $67M in annual revenue. I think we managed to take such a market share because we listened to the needs of our customers. In addition to manufacturing, we have our own service centers in four regions of Russia and in Minsk where we can offer equipment maintenance.
- Do you have some platform for experimentation, testing, and improvement of equipment?
- In 2008, when the crisis hit, I launched a big project. Then we communicated with a large number of customers, and I turned my attention to experienced specialists from the Tambov region. With their participation, we decided to set up an internet provider company "Atlas Telecom" in the central part of Russia.
At the time, most regions relied on copper-based internet providers (ethernet technology). We, however, decided to build our network on fiber optics (PON technology), which gave us a competitive advantage. This company reached the audience of the agglomeration of 1.5 million people. We have expanded the telecommunications network by over 2.5 thousand km and covered an area of 1.5 thousand square kilometers. The network offered an Internet connection with a speed of 100 Mbit/s at a very affordable price of just $3.5 per month for citizens.
It was also particularly important for us that in this network, we could test the equipment we produced, see how it worked in combination, and, based on the conclusions obtained, sell ready-made solutions. It was a unique experience for the market and for our company.
Thanks to this project, Fibertool has become a "digital supermarket." We now supply not just individual components but the full range of equipment for network construction. We also started training our customers. It's one thing to talk about the functionality of the equipment in the office, but it's another thing to be able to show everything in action at a real working site. This is an invaluable advantage.
- In addition to producing equipment to connect to the Internet, you are involved in an innovative project in Skolkovo which helps to ensure the protection of the airport perimeter. Can you share more details about this?
- Indeed, at some point, we realized that we had already invented a lot of things and learned how to produce them. I always wanted to be a part of creating something new, and a promising field of Fiber Optic Sensing was just beginning to develop in the industry. I had the idea of creating a device that could be used to protect the perimeter from unauthorized intrusion.
So, I launched a startup to create a "coherent reflectometer". In 2013, I founded a new company, Fiber Optic Security Systems (Optolex), and began assembling a team for the project. At that time, Skolkovo was gaining momentum, and we decided to become residents of this scientific cluster. We did the exam and passed it on the first try.
How does a "coherent reflectometer" work? It is based on a fiber-optic cable, which can be laid along the perimeter of an object up to 100 km long, both outside and buried in the ground. The high sensitivity of the optical fiber, even to small vibrations, allows you to collect information about what is happening around this cable. All noise data is passed through neural network algorithms, pre-trained on signal samples, which accurately detect the noise of human steps or a car engine, or an attempt to climb a fence. Further, fixing and studying events allows us to adapt and train the artificial intelligence of our equipment.
The device has already been implemented for the protection of airports in Russia and Kazakhstan. One of these airports is in Yakutia - a region with abnormally low temperatures. Additionally, the system was used in India to protect a pipeline against illegal taps and connections to oil refinery pipes.
- How do you assess the prospects of this technology, and where else can it be used?
- Assessing the prospects of this technology, it's clear that it has the potential to play a significant role in our lives in the near future. It has a wide application as it can be used in a variety of ways and industries.
One example of its potential application is in preserving roadway infrastructure, especially from wear and tear.
We had an interesting case with the Traffic Management Center in Moscow. Where we developed a sensor that measures the pressure on each axle of a truck. The idea was to install these sensors on the Moscow Ring Road to detect overloaded vehicles.
There was an idea to place such sensors on the Moscow Ring Road, and if a car is overloaded, special equipment would read its number, and the car owner would receive a violation notice. The use of this technology allows real-time monitoring of the condition of the roadway, bridges, and overpasses and assesses the need for repairs, and effectively schedules work. As a result, road quality and safety for all road users are significantly improved, while the cost of operating road infrastructure is reduced.
Another area where this technology could be used is forest protection. By laying a fiber-optic cable in the forest, if a fire breaks out, the forest service would receive a signal, and a helicopter could be sent to the scene with the appropriate amount of water to extinguish the fire.
In addition, this technology can also be used in architecture. Currently, electrical sensors are installed during building construction to signal if the building starts to deviate from its axis. However, fiber-optic sensors can be used instead, which are easier and cheaper to maintain over time.
- Right now, 5G technology is actively developing in the world. How will this trend affect the fiber optic market?
- The technology will make it possible to connect more users to the Internet. The construction of 5G networks will require a large number of base stations to which fiber optics will be pulled.
Data consumption is already on the rise, driven by factors such as the growing popularity of IoT. Various devices and appliances that are controlled remotely are being actively purchased. As more and more homes are equipped with smart devices such as fire alarms and leak detectors, the need for high-speed internet to transmit this information in real-time is becoming increasingly important. Additionally, the growing demand for high-quality digital content, particularly video, is also driving the need for faster internet speeds. TVs with 8K picture quality are already being sold, and services like YouTube are reaching a new level of streaming, requiring swift internet connections.
The development of 5G technology will also bring new levels of efficiency to network construction as new equipment and systems are developed. For example, we are implementing a new system for our fiber optic splicers that will connect each device to a network. This will allow us to collect information on the employee using the machine, track the location and activities of installation crews, and monitor the number of welds made and equipment lifespan. Using such technology helps optimize crew movement and reduce maintenance costs.
- Your company has an office in Texas in 2020. Why did you decide to enter the U.S. market, and what are your plans for development?
- Indeed, we opened an office in the US two years ago. During this time, we conducted market research and analysis. Our CEO is now actively showcasing our products to potential customers through various trade show events. In addition to the office in Texas, we opened a warehouse in the area for storing and testing our instruments and equipment, as well as a service center for customer support. I think in the future some of the products will be manufactured at the new site.
The U.S. government is now embarking on a massive effort to replace aging networks and construct new ones. Significant funding, amounting to $200 billion, has been allocated to enhance internet communication infrastructure.. As a result of this initiative, our expertise and equipment will be in high demand. We are confident that we can provide even more efficient solutions than what we currently offer in the CIS countries.
