SDM and the Era of Virtual Cables
As published in the May Issue of SubTel Forum Magazine
By John Tibbles
May 19, 2022
By John TibblesOne of the nice things about semi-retirement and working for oneself is that you are your own media relations or corporate affairs department. This allows some free speculation about the development that may radically change the subsea industry which is interesting and hopefully thought-provoking.
Introduction – Inexorable Change
Over the past thirty years, subsea fibre optic cables have experienced remarkable growth in terms of capability, range and capacity. They have gone from an obscure and minor part in the global telecoms revolution that satellite communications brought about, to a key element of the digital economy, recognised as critical infrastructure around the world.
In large part, this has been because of the ability of subsea cables to evolve especially in terms of capacity. From the early PDH systems, which had capacity minute by modern standards but at the time aroused worries that they could never be fully utilised subsea systems have had the capability of readily meeting the demands placed on them. Of course, the technical capability was not matched by the assessments of commercial viability and many of the major global carriers preferred to invest in mobile services or ‘content ‘. In hindsight, it was a bad decision because the shadow of Google and Facebook and others was already looming. These new parties did have a global vision and decided that the traditional source of capacity, the big carriers, would not meet their needs so they would build their own cables. We all know what that has done to the subsea business!
Technology Challenges
Alongside the commercial and economic developments technology however continued to evolve in terms of providing the capability for systems to operate over longer distances and with more flexibility.
Initially, it was just the application of small improvements in optical technology that allowed the capacity of cables to increase through the 1990s and the early years of this century. It was DWDM that really showed what could be done with subsea systems with step changes of multiples of system capacity not just incremental increases.
As it became apparent that even more wavelengths could be carried on one pair, demand was perhaps for the first time catching up with supply and manufacturers had to look beyond this technology to get more capacity from the basic cable system. By basic, I of course mean the cable sheath, the repeaters/regenerators and installation costs which are fixed costs that have to be met if there are four or twenty-four fibre pairs.
To an outsider, it might seem strange that the idea of just putting more fibres in the cable was not taken up instead of the superficially more complex DWDM However it requires overcoming complex challenges in repeater design, laser optics and power technologies to make more fibre pairs, or its grander name, Space Division Multiplexing, a practical solution
Commercial Considerations
Despite the changes in the industry, from carrier domination, private systems, and the condominium systems pioneered by the big data companies one thing remained the same. There was a great deal of sharing required. A lot of common equipment and technology was involved in proving the end-user products of 10gbs, 100Gbs, 400Gbs, paths with the occasional whole fibre pair transaction often done as a swap between two of the newer ‘Big Data’ financed systems to provide mutual diversity.
While the concept of Open Cables replaced the often restrictive and access limiting options of the past, end-users were still very reliant on the cable owner. These were still required to manage their service and provide the capability for expansion of an end-users’ network. In many ways, these systems were not that different from the consortium projects the original model for all subsea cables.
SDM is different even though everything is still contained in the same basic cable design. Some of the earlier condominium systems allowed companies with very deep pockets to buy a whole fibre pair and manage that themselves within specifications to preserve overall system integrity. Going from 6 or 8 fibre pairs to 24 or even 32 is a huge change in terms of the capacity of the cable but more importantly, it makes a huge difference to the cost per fibre pair.
As a very basic example, if the cost of a conventional 6 pair DWDM system between points A and B is $300M the nominal cost of a fibre pair is $50m. That is a lot of money but with say 30 pairs the initial project cost might increase to $360M but the cost per pair is now just $12m. This brings a fibre pair within reach of smaller carriers, ISPs and other digital services providers. (And yes, that is a very simple illustration of the huge change in affordability). It has also made possible the likes of the Meta (Facebook) 2Africa cable where one system can serve a great many parties and indeed many nations. With 2Africa, perhaps the boldest system concept to date, each party can get the discrete/secure communications it needs without multiple intermediate landings, sometimes in countries, it does not regard as friends.
Strategic Implications.
As has been highlighted above SDM cables make owning connectivity at the fibre pair level affordable and attainable to a wide range of parties who could never justify the investment. Of course, just like cables themselves owning one fibre pair is not enough because you need network resilience and therefore you often need a second fibre pair much in the way the OTTs swapped pairs on the early systems that they sponsored.
Of course, with one pair in just one cable resilience is an issue and breaks will still happen. However, on a system like 2Africa, parties can for example afford a pair in two different directions giving them genuine diversity. In a more developed market like the Atlantic, a fibre pair on different SDM based systems would mean that even relatively small operators can run fully protected end to end services at a far lower cost base than previously. It also means they may no longer need to manage multiple wavelengths spread across different systems with different latencies
Digital services are a market that evolves very quickly. All kinds of innovations and services tailored to one or another industry are commonplace, but in the past, the connectivity costs made them difficult to deploy globally without support from a global operator of some kind. Now it is possible for parties to genuinely own their whole network, increase capacity as required and have complete security over the carriage of their data. A worldwide in-house LAN.
In simple terms, almost anyone who would like a fibre pair (or two) but had to go through intermediaries to obtain affordable capacity can now do so on their own be they a country, a global ISP, a member of the exclusive “Big Data” club.
Buy Your Own “Virtual Cable”
For the first time, it is no longer prohibitively expensive to buy what is in effect your own tailor-made private subsea cable. Something which can be plugged into your existing network, running to your own demands without the need to outsource that last missing piece. I would speculate that this brings fibre pair ownership within easy reach of the major international banks and other global financial services companies, major airlines, global energy companies or entertainment content providers/sporting event rights holders. Markets where major corporations traditionally had to go to carriers or similar to provide their global network services. Additionally, data centre titans like Equinix or carrier-neutral platform providers like DE-CIX or India’s Lightstorm would seem to be ideal customers for open access fibre pairs giving them more control and more capacity.
Because of the ever-evolving nature of communications, it is reasonable to speculate that there are other digital services companies still ‘under the radar’ that need large amounts of capacity and low latency. Discrete fibre pair ownership will facilitate newer enterprises make that big step from dependency to independence for digital transport more easily than in the past and allowing them to access economies of scale once denied to market entrants.
It is a similar issue for countries, especially smaller ones, getting capacity on the scale 2Africa can deliver would have been completely prohibitive for some of the states on this route with conventional systems. Another attraction is knowing exactly where your data is going, or more accurately, not going. Competition and suspicion between countries is a historical inevitability and is not going away anytime soon.
Summary Thoughts
- SDM makes large scale capacity much more affordable;
- SDM will allow much more connectivity to the major nodes of the global network from the developing world as smaller nations can afford such large-scale connectivity
- SDM will change the market dynamics between the major nodes allowing new market entrants, for whom long haul data transport is not their major business, to economically up- gauge their own networks.
- Will the huge cost advantage of SDM cables be a further accelerator to the retirement of older systems? Recurrent operating costs can make older systems uneconomic, and industry commentators have already highlighted this happening already as a result of higher capacity DWDM systems.
- Might SDM reduce the number of cables in say the Atlantic or Pacific for the reasons above and therefore reduce resilience and increase vulnerability, deliberate or accidental, as users look to rationalise networks for lower costs but with fewer paths? What will be the impact on system suppliers, and optical transmission equipment vendors?
- Could the enormous capacity of the SDM systems make the big data ‘system sponsors’ seek out partners to share the financial risk? Perhaps bringing new entrants to the wholesale market especially entities already involved with digital infrastructure investment. Some such investors are looking to diversify from towers and data centres but have shied away from subsea in the past but with a large part of the project cost covered by a deep pockets sponsor, they may see these opportunities as potentially profitable and less risky.
Conclusion?
“Surely you will never fill a system that size?” This is a question many of us have heard from senior management or investors; but we did. So, a couple of questions to end with:
Q1 Will SDM disrupt the current market structure for subsea capacity?
History tells us Probably Yes.
Q2. SDM is a major step change but just how many fibres can you get in a system without heat dissipation problems or repeaters being too unwieldy for deployment or recovery. Those constraints allied to optical technology approaching the Shannon limit beg the question have we reached a development plateau?
History tells us Probably No.
About the Author
John Tibbles has spent a working lifetime in global telecoms much of it in the subsea cable arena where he held senior positions responsible for subsea investments and operations at Cable and Wireless and MCI WorldCom and as an internal advisor consultant to Reach and Telstra Reach. John spent many years working for C&W in Bermuda and established the first private subsea cable offshore company and has worked extensively with both consortia and private system models. He has a wide background and expertise in most commercial matters of international telecoms and since ‘retiring’ he has remained active in the industry as a consultant, commentator and at times a court appointed expert and has been a panellist and moderator at international events.
