The submarine fiber market continues to grow through 2020 at a similar rate to that observed since 2016. Some regions have begun to slow their pace with fewer systems planned beyond 2021. There are some overbuild concerns considering the rapid pace of system development over the last few years, but many cable systems that are reaching the end of their economic and technological lifespans and will need replacing.
Due to increasing capacity demands along the north Transatlantic between New York and Europe, and the desire for new connections to the Mid-Atlantic of the United States and across the South Atlantic, the Transatlantic route has enjoyed steady growth. The need for more infrastructure is on the rise by Content Providers operating in the region and upgrades to existing systems do not adequately meet demand.
As with the Transatlantic market, until very recently the Transpacific has been almost fully saturated with available capacity, leaving little room for growth other than route diversity and cutting down on existing latency. Lately, however, new systems are being explored in a similar manner to the Transatlantic. Demand from Content Providers and increased desire for route diversity are the primary drivers behind these newer Transpacific systems.
Continuing off its strong growth trend, the Americas region has only a handful of systems planned for the next several years. The last few years have been relatively busy even compared to historical trends for the region. With a development rate that has remained steady since 2001, the period 2020-2023 should still be within historical norms or even slightly ahead of them.
Most new systems in AustralAsia will connect small nations to mainland Asia or existing international pipelines, while a handful will span nearly the entire region. While this region has seen a tremendous amount of growth in recent years, activity has slowed down considerably. Most major population centers in the area have now been connected to the international telecommunications network and growth in the Pacific has shifted towards Transpacific routes connecting data center locations.
The EMEA region has averaged three new systems every year since 2002. This region has historically been characterized by the inter-regional cables as well as large coastal systems ringing Africa. The EMEA region is the most consistent in the world and has a growth pattern that is seemingly immune to the industry’s boom and bust pattern seen over the past 15 years. Unfortunately, the EMEA region continues to be rife with economic uncertainty and political instability, casting a cloud over any prospective projects that go through the Middle East. However, new activity is observed in exploring additional connectivity between Europe and India as well as new Nordic projects to support their growing data center market.
The Indian Ocean Pan-East Asian region does not generally have a strong telecoms presence on its own. However, with Australia looking for more route diversity from its western coast, an increasing desire for connectivity between Asia and Europe and the continued growth of India’s telecommunications industry, the region is prime for growth. Additionally, there are hints that Content Providers will explore routes from the United States to India and potentially bring more system development to the region.
Interest in Polar projects has grown over the past few years, as cable developers are looking to take advantage of significantly shorter routes that can be achieved through the Arctic Circle. Additionally, systems exploring Arctic routes avoid the troubled Middle East region and circumvent potential privacy concerns in the United States.