SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 8.1: TRANSATLANTIC REGIONAL MARKET

Regional Snapshot

• Current Systems: 18
• Capacity: 697 Tbps
• Planned Systems: 4
• Planned Capacity: 490 Tbps

Transatlantic Systems

8.1.1 Current Systems

Table 3: Transatlantic Systems, 2001-Present

Growth on the Transatlantic route skyrocketed from the late 1990s through 2003. After a 12-year drought, the Transatlantic region has seen a new cable every year for the last 5 years. (Figure 66)

Figure 66 – Systems in Service -Transatlantic

Two major causes of the development slowdown were a glut of capacity and the financial crash of the early 2000s which was brought on by overinvestment in the submarine cable industry. With investment on the rise again, and systems aging out in the Transatlantic route, new systems are beginning to come online. The MAREA system installed in 2017 tapped into the exploding demand from OTT providers, with one of the key selling points being massive bandwidth available — 160 Tbps potential — on a modern submarine fiber system on a route full of aging cables. Additionally, this cable provided an alternative path to increase route diversity, and more directly connect Europe to important data centers in Ashburn, Virginia. The SACS and SAIL cables installed in 2018 continue this push for alternative routes and connect South America and Africa directly.

Due to increasing capacity demands along the north Transatlantic between the 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.

8.1.2 Future Systems

Table 4: Transatlantic Planned Systems

During the last boom of Transatlantic system development, the average system length was roughly 12,000 kms with most systems taking similar routes between Europe and the US.

Figure 67 – KMS Added – Transatlantic

With the rise in demand for low latency systems, planned systems for 2019 and beyond average roughly 8,000 kms based on their announced routes. (Figure 67) The change in customer requirements from purely bandwidth to bandwidth and low latency has driven developers to plan routes averaging 29 percent shorter than previous systems from the early 2000s, with proposed systems claiming to drop up to 40ms latency due to being shorter by an average of 4,000 kilometers in addition to providing much needed infrastructure. However, some of the proposed South Atlantic systems are considerably larger than the more traditional Transatlantic systems and will address different needs than the region is used to.

There are currently four planned systems set to be ready for service for the period 2020-2022 in the Transatlantic region. Only one of these planned systems are along the northern route between Europe and the United States, further illustrating the desire to move away from traditional Transatlantic routes. There are two systems planned between Brazil and Africa and one system planned between Brazil and Europe. Brazil continues to work on getting its own international connections without going through the United States, while tech giants such as Microsoft and Facebook want connections between Europe and the Ashburn, Virginia data centers.

Figure 68 – Contract in Force – Transatlantic, 2020-2022

Three-fourths of planned Transatlantic systems have achieved the all-important CIF milestone. (Figure 68) This indicates healthy growth in the region and solidifies the idea that new cables and new routes are highly desired.

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