Subsea cable trends and opportunities beyond 2018

31 Dec 2018

The world continues to become smaller – from a connectivity point perspective.

Laid out on the ocean floor, submarine cable systems are used primarily for communication and electric transmission. Fiber-optic cables are used by communications service providers and private companies, such as Google, Facebook, and Microsoft, to provide their services across regions.

According to the report “Submarine Cable System Market by Application (Communication, Power), Component (Dry Plant, Wet Plant (Cables, Branching Units, Repeaters)), Offering (Installation & Commissioning, Maintenance, Upgrades), and Region - Global Forecast to 2023” the submarine cable system market will reach $20.93 billion by 2023, growing at a CAGR of 12.25% from 2018 to 2023.

Since 2013, there has been a resurgence in submarine cable deployment, particularly in Asia Pacific, is said to be driven by growth in demand for Internet connectivity. The largest of the subsea cable network is referred as the Trans-Atlantic segment and comprises more than 13 communications cable systems with an estimated capacity of 308 Tbps. Four new planned submarine cable systems will add a further 262 Tbps of capacity when completed.

According to TeleGeography, in 2018 there are over 1.2 million km of submarine communication cables in service all over the world.

Telecom Asia spoke to Mike Constable, chief executive officer for Huawei Marine, on his view of the future of subsea cables not just in Asia but around the world. He believes that connectivity is the reason why economies are progressively moving toward digitization.

“The fundamental backbone of all connectivity is the submarine cable. While wireless broadband can bring connectivity within a country, it is the network of submarine cables laid out on the ocean floor that is responsible for ensuring that people, businesses and governments are able to communicate with each other globally,” he explained.

Historically the owners of these expensive communications networks are telecom operators or consortia of such businesses. However the rise in importance of content and the need to access data has seen the entry of non-telco companies like Amazon, Facebook, Google and Microsoft in recent years. Google invested in its first submarine cable in 2008.

“Prior to this trend of data and content, most submarine cable investments were centered around connecting population centers. This has slowly transformed in the last ten years to be a global network topology which is data center centric – where data center connectivity is the key driver in the investment cycle,” Constable elaborated.

He also conceded that the rise in machine-to-machine traffic is instrumental in this trend. “In the last five years, machine-to-machine traffic has multiplied five times. Around 80% of the traffic across the Atlantic is machine-to-machine. Humans are playing less of a role in creating data,” he concluded.

Watch the full video to hear about the competitive landscape for submarine cables, investment cycle trends and who or what will drive the future for submarine cable networks.

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