Extending Fibre Optic Cable Depreciation: From 25 to 40 Years

Previously, the accepted useful life of fibre‑optic cabling landed around 25 years, in line with standard depreciation practices. However, growing evidence and industry trends suggest that fibre infrastructure can remain effective—and financially sound—for much longer. This aligns with our previous overview and case study that emphasise how fibre’s actual physical resilience and low maintenance costs support extended asset lifespans .

1. Why Extend Depreciation to 40 Years?

By recognising a 40‑year life, organisations:

• Spread costs over a longer timeline, reducing annual depreciation expense.

• Get closer to the true lifespan of quality-installed fibre, delaying asset replacement.

• Improve financial statements and forecasts, boosting long-term planning clarity.

2. The Technical & Financial Rationale

In our earlier cable depreciation case study, we explained that fibre optic networks—when installed correctly—show minimal environmental wear and remain free from obsolescence-related degradation bridge-connect.com.Similarly, in a later blog, we noted that “rapid technological advances” don't necessarily shorten fibre life—its core durability remains sound bridge-connect.com.

Putting those together:

• Minimal physical degradation when installed in protected ducts or aerial enclosures.

• Technological longevity: upgrades to electronics or protocols can extend fibre usability indefinitely.

• Maintenance‑driven value preservation: regular testing and localized repair (rather than large-scale replacement) sustain network performance over 40+ years.

3. Acceptance by Tier‑1 Auditors

We've presented this extended depreciation model to several Tier‑1 audit firms servicing telecom and infrastructure companies. Key outcomes:

• Full endorsement under IFRS and GAAP frameworks: auditors recognised both the physical durability and the economic rationale.

• Supporting documentation was key: we provided fibre stress tests, maintenance logs, and comparative financial models (25 vs 40 yr).

• No objections raised—in all reviewed audits, the longer useful life was adopted, and fiscal implications validated.

4. Case Study Example

• Operator A deployed 10,000 km of fibre, initially depreciated over 25 years (~4% annual rate).

• Upon review, they switched to 40 years (~2.5% annual rate), reducing depreciation expense by ~40% per year.

• Auditors agreed, observing that the fibre remained fully functional, tested below attenuation thresholds, and aligned with industry benchmarks.

5. Strategic Benefits for Asset Owners

• Financial impact

  • Depreciation expense: lowering from ~4% to ~2.5% annually ups reported earnings and cash flows.

  • Budget planning: maintenance and upgrade cycles can be rebalanced, avoiding premature replacements.

• Operational impact

  • Support for long-term infrastructure planning, aligning with network expansion goals.

  • Tax planning benefits, where regulations allow longer useful life for capital allowance calculations.

• Regulatory and market impact

  • Stronger balance sheets and improved ratios, supporting credit ratings and borrowing capacity.

  • Investor confidence, with clarity and transparency on asset valuation.

6. Transitioning to a 40-Year Depreciation Model

For operators considering a shift to a longer depreciation horizon, success depends on presenting a credible, evidence-based case that reflects operational realities and aligns with accepted accounting standards.

At Bridge‑Connect, we've worked with clients to support this transition by:

• Framing the technical and financial rationale clearly for internal and external stakeholders

• Engaging directly with Tier‑1 audit teams to ensure early buy-in

• Ensuring the process remains robust, defensible, and repeatable across reporting periods

While each case requires tailoring to the operator's asset base and financial context, we’ve seen consistently positive outcomes when the shift is approached strategically and collaboratively.

7. Conclusion

Bridge‑Connect is proud to lead in the recognition of fibre’s true longevity. By extending asset lives to 40 years and securing auditor backing, operators now benefit from smoother depreciation schedules, stronger financials, and aligned long-term infrastructure strategies.

Get in touch to discuss how we can help you make the transition—and join the growing list of operators strengthening their bottom line through smarter depreciation practices.