NTT Undersea Cable Venture to Handle Surging Net Traffic
By Akane Okutsu, Nikkei
December 12, 2019
By Akane Okutsu, NikkeiTOKYO — Japan's largest telecom company, Nippon Telegraph & Telephone (NTT) will lay a new submarine cable connecting Myanmar and India amid surging demand for global internet links.
The investment, worth around $400 million, will be undertaken with a leading internet content provider such as Google or Facebook. Such companies are big users of communication cables.
In addition to Mumbai and Chennai, the Mist cable will come ashore in Singapore, which is the central hub connecting Asia to the rest of the world. The cable is designed for a maximum transmission speed of 240 terabits per second.
NTT Ltd., which oversees NTT's global business, formed a joint venture in October specializing in undersea cable projects with Japan ICT Fund and Singapore based Wen Capital. The joint venture plans to increase its investments to lay multiple undersea cables over the long term.
According to NTT Ltd. Director Hajime Miyazaki, the venture aims to speed decision-making on the laying of new cables. Submarine cables are usually financed by consortia of several companies, but the time required to reach a consensus among the investors can slow down the process, Miyazaki said.
NTT's move takes place against a backdrop of a construction boom in submarine cables, which are key to handling rapidly growing internet traffic. According to a report by Submarine Telecoms Forum, global demand for bandwidth is forecast to double every two years for the foreseeable future, due the growth of cloud-based services and technologies such as 5G.
While telecom companies led the previous burst of cable construction in the late 1990s, this time around content providers have been driving new projects. Companies such as Google, Amazon, Facebook and Microsoft used 54% of the total international bandwidth as of 2018, up from less than 10% in 2012, according to market research specialist Telegeography.
