SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 4: SYSTEM MAINTENANCE
Without doubt, the headwinds facing the submarine telecom maintenance industry continue to build. Older lower capacity cables look towards retirement while the younger generation of high capacity builds continue to satisfy our unabated appetite for low latency bandwidth. We count cable ships, make assumptions about their capability based on age and ask ourselves “What next?”
Well the good news is that the number of cable ships is increasing, albeit slowly. The bad news is they are getting older and from a fleet of 47 (give or take), only 4 have been built in the last decade as direct replacements. But despite our disparaging mindset about ageism, the global fleet continues to support the market. Statistics may indicate time to repair is increasing in some parts of the world but look a little deeper and we will find that protectionism aka cabotage and increased regulation is the root cause of delay. This creates domestic opportunity and new players emerge to solve any emergent issues.
With increased competition, unit costs to maintain or repair cables continues to fall as it has for the past twenty years in tandem with capacity pricing. But salaries, steel and fuel are commoditized and we are reaching the limits of what can be achieved through rigorous procurement practice, but there are emergent indicators of change. The next generation of repair platforms will benefit from improvements in marine technology: they will operate with fewer people, burn less fuel, be more powerful and flexible enough to work across industry sectors. A modern ‘repair’ vessel will offer services to the telecom, renewables and oil & gas markets. It is already happening. The traditional cost-sharing models are changing, allowing the vessel operators to streamline investment risk and use their vessel more effectively and efficiently than in the past. With the global proliferation of wind farms, new ideas and ways to solve collective problems are being addressed which can hopefully result in lowering the unit cost of wet maintenance in the telecom sector. The current batch of vessels, most of which are based on 1990s technology will need to be replaced by DP2 platforms with more powerful and effective ROVs. It does require more dialogue and knowledge-sharing between the power & telecom sectors but with increased demand for access and rights to the sea floor from different stakeholders, there are overlaps and inevitable compromise results.