Spotlight on Asia Regional Cable Systems
By Andrew Oon
July 24, 2018
A Data Center Perspective
It has been a roller-coaster ride over the past 20 years, which is almost one design lifespan of a cable system. In SubTel Forum Issue 100, Stephen Nielsen described the despondent state of the submarine cable industry in 2001, immediately after the “dot-com” bubble had spectacularly burst. From a data center perspective, in the five years thereafter, only a few major cable systems were deployed into Equinix data centers around Asia. In the years 2007-2012, there was a new lease of life, partially driven by regional telecommunications deregulation, and partially driven by necessity – the earthquake off the coast of Taiwan impacted 8 major Asian submarine cable systems, resulting in 18 system cuts and severely disrupted Internet services around Asia. This necessitated additional redundancy both Westbound and Eastbound out of Asia. Subsea cable activity dropped again in the next five years, only to rebound recently, in a way few in the industry would have foreseen.
For the period from 2017-2021, there are more than fifteen cable systems that have either come into service, or that are planned to be built around Asia, and this is representative of the level of (subsea) cable activity we are seeing in the Asian region today. Particularly when capacity prices are dropping in Asia, we ask ourselves – what is driving this huge surge in activity in the submarine cable industry and what are the factors driving this investment?
- Telecommunications deregulation
Year 2000 saw telecommunications deregulation in Singapore, when the government opened up the market to foreign investment and full competition. A stable political and economic environment, a clear regulatory framework, as well as a strategic geographic location established the island republic as a “hub” for Southeast Asia. This has resulted in Singapore being the termination point for a significant number of subsea cable systems. In general, where we have observed a more liberal telecoms environment, we also see a larger number of subsea cable terminations, as in the case of Australia, Hong Kong, Japan, and Taiwan.