SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 3.1: SYSTEM SUPPLIERS

3.1.1 Current Systems

Based on each supplier’s reported activity by region for the period 2015-2019, companies are keeping a heavy focus on the Americas, Transatlantic and Transpacific. ASN and SubCom were the busiest suppliers over this five-year period. Most of the smaller to mid-size companies almost exclusively focus on their “home” regions — such as NEC being the most active in the Transpacific and AustralAsia regions. Huawei Marine, however, bucks the trend by being the most active in the EMEA region, specifically Africa.

Figure 34 - Number of Systems by Supplier, 2015-2019

Figure 34 – Number of Systems by Supplier, 2015-2019

According to announced information on the amount of cable each company has supplied over the last 5 years, SubCom takes the lead — with over 100,000 kilometers of cable produced. NEC produced the next most at 68,000 kilometers, with ASN rounding out the 3 busiest companies at 49,000 kilometers produced. These 3 companies have been very dominant in recent years, being some of the few companies that can produce cable at a high enough volume to meet demand for large systems. So, while some companies had a relatively high amount of activity, they were not always supplying large systems. (Figure 34) (Figure 35)

Figure 35 - KMS of Cable Produced by Supplier, 2015-2019

Figure 35 – KMS of Cable Produced by Supplier, 2015-2019

Hexatronic, Nexans, NSW and PadTec are diversifying their portfolios to include other markets besides submarine fiber – such as offshore wind power – as these markets can be more lucrative for them. Overall, their participation in submarine telecoms is low for the period 2015-2019.

Over the last couple of years, there has been a renewed interest in Transpacific routes and routes connecting Asia and South America directly to Europe. This will involve vast systems, requiring thousands of kilometers of cable. Moving forward, the industry will have to rely on only three companies to tackle large projects.

3.1.2 Future Systems

Regional plans will differ slightly compared to recent years. The AustralAsia region is no longer driving the bulk of new system demand as the Pacific island nations are nearly all connected. In contrast, there is renewed focus on crossing the Atlantic – albeit taking slightly different routes than the historically dominant London to New York. As more owners and service providers look to circumvent the tumultuous Middle East, expect activity there to persist in its decline. The Oil & Gas industry will maintain demand off the coasts of Africa and Australia if oil prices cooperate and expect emerging markets in South America to increase activity in the Americas and south Transatlantic regions as well.

OTTs are becoming increasingly responsible for new system demand; especially for the Americas, Transatlantic and Transpacific regions. These companies, specifically Facebook, Google, Microsoft and Amazon, are consuming bandwidth at an increasingly rapid pace. Rather than buying bandwidth on existing cables, these companies have found it easier and increasingly necessary to build and own international telecoms infrastructure.

Figure 36 - Planned Systems by Supplier, 2020-2022

Figure 36 – Planned Systems by Supplier, 2020-2022

Overall, SubCom will continue to be a strong leader in the supply industry. They have been the most active and can supply the largest volume of cable and equipment. Looking forward, NEC may be ramping up production again while Huawei will fade a bit with no major projects currently on the docket. (Figure 36)

Every one of these system suppliers are composed of industry veterans with many years of experience in the submarine fiber industry. Their innovative technologies and reliable production are what continue to drive the telecommunications industry forward into the future. With robust competition between numerous companies, continue to expect a healthy cable supplier industry.