Settling into Cruising Speed
By Kieran Clark
July 24, 2018
Regional Systems Outlook
Last year was undoubtedly one of the most productive the submarine fiber industry has had since before the industry crash of the early 2000s. After a disappointing 2016 – which saw only 6 new systems and 35,000 kilometers of new cable – implementing 15 new systems and reaching the 100,000 kilometers mark again was a welcome change in 2017.
However, with 2018 more than half over it is clear that the industry is not able to sustain that level of output. By year’s end, we will have added only 57,000 kilometers of new cable which, while still significantly better than anything compared to 2011-2016, is still a far cry from last year.
So, the question is: Why? Is it Over-The-Top (OTT) providers reaching the end of their infrastructure plans? A slow down in demand? Or did the industry simply peak last year and is now settling into a more comfortable cruising speed?
At the time of our last Regional Systems edition, 30 systems were set to be ready for service in 2017, 18 systems in 2018, and 9 systems in 2019. One year later, those numbers have changed to 15 systems in 2017, 15 systems in 2018, 18 systems in 2019 and 18 systems in 2020. While 2017 saw a dramatic reduction of planned systems, several of those systems simply slipped to 2018 and later rather than outright dying. However, a continued surge of planned systems through 2020 have been observed. Overall — and despite the large shortfall in 2017 — there has been a 16 percent increase in systems under development since our last edition. This is half of the growth rate from a year ago, and indicates a potential slowdown in system development.
Of the systems scheduled to be ready for service in 2018, only 3 have been put in to service. From the remaining 2018 projects 3 systems have completed their marine surveys, another 3 have completed cable manufacturing and 2 other systems projected to be ready for service this year have been installed. The remaining 4 systems remain in the pre-engineering phase. Looking ahead to 2019, only 5 systems have completed their marine survey, 1 system has completed the manufacturing process, and the remaining 12 systems are still in the pre-engineering phase.