In September, for example, Southern Cross' director of sales and marketing, Ross Pfeffer, told Telecom Asia that the operator is formally looking into building a new cable from New Zealand to the US, citing the upcoming surge in traffic that NBN plans in Australia and New Zealand are expected to generate.
And while SLTE solutions are being touted as cheaper options to building new systems, TeleGeography analyst Alan Mauldin points out that many of the new systems are simpler and cheaper to build. "Most of these new cables cover shorter distances and employ simpler designs than their predecessors, helping to keep costs in check." For reference, he adds, compare the $2.6 billion being spent on cable deployments this year - which, remember, works out to more systems than the ones built during 2001 bubble - to the $13.5 billion invested in new systems during that bubble.
Of course, one of the issues informing these new systems is not just raw capacity but also latency. As internet traffic - much of which is increasingly time-sensitive, like video and VoIP - grows in certain areas, the engineering challenge isn't just to get it there in the fastest time possible, but also via the most direct path. Which is why one of the hot selling points of the new TGN-IA systems was direct fiber paths within Asia that enable reduced latency times (Tata claimed that its Singapore-Tokyo link sports an RTD of 63ms).
Maximizing cable life
Still, even if all that means the 40G SLTE market will be limited to case-by-case uptake, it's still a market that Ovum's Kline says will grow from $843 million in 2Q09 to $2.2 billion by 2014 (though how much of that will be 10G, 40G or even 100G isn't clear).
In any case, it's a real market that SLTE vendors are more than willing to serve, says Nortel's McLachlan.
"There's a need to build a lot of latent capacity on these systems that operators can sell," he says. "They're still doing 15-year IRUs on ten-year-old cables, so they're looking to extend the life out of them, and to do it as quickly as possible. If I can double or quadruple the capacity on a particular link and do it fast, that's significant revenue potential for that asset they've got in the ground. What we're saying to the existing cable operators is that they have an opportunity to add incremental capacity to a sunk investment, which allows them to revalue their assets and drive more revenue from it."