Submarine cable construction continues despite untapped potential capacity

18 Apr 2012

New data from TeleGeography’s Global Bandwidth Research Service reflect the recent surge in submarine cable construction globally. In 2010 and 2011, 19 systems worth an aggregate $3.7 billion were launched, and the pace of growth will only pick up in the next few years. Throughout 2012 and 2013, 33 submarine cable systems costing a projected total of $5.5 billion will be deployed.

Two Middle Eastern systems—Gulf Bridge International and Tata’s TGN-Gulf cable—came online in Q1 2012. The West African Cable System (WACS) and the Africa Coast to Europe (ACE) network will also begin service this year, spanning the entire West African coast and extending to Europe. Other major upcoming projects include a pair of sizable intra-Asian cables: the Asia Submarine-cable Express, which is to be deployed in Q3 2012 and the Southeast Asia Japan Cable, which is scheduled for Q3 2013. The America Movil-1 cable in Latin America will be deployed in Q4 2012.

In light of the tremendous untapped potential capacity on many existing submarine cables, it may seem surprising that new cable construction continues around the world. “Capacity constraints are not driving most new cable projects,” said TeleGeography analyst Tim Stronge. “Operators are deploying new systems for a variety of reasons, including physical route diversity, latency reduction, strategic advantage, and the lure of relatively high price margins on some routes.”

Additional submarine cables have been proposed for construction beyond 2013, including several trans-Arctic systems and four cables between South America and Africa. “While a few of these systems may be built, it’s likely that many others will fall by the wayside, joining the long list of projects that never launched, due to a lack of funding or carrier support,” said Stronge.

TeleGeography’s Global Bandwidth Research Service provides detailed data for the long-haul networks and submarine cable industry, including supply, demand, cost, and pricing analysis and profiles for 325 network operators and 252 submarine cables.

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