SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 8.2: TRANSPACIFIC REGIONAL MARKET

Regional Snapshot

  • Current Systems: 14
  • Capacity: 672 Tbps
  • Planned Systems: 8
  • Planned Capacity: 350 Tbps
Transpacific Systems

Transpacific Systems

8.2.1 Current Systems

Table 5: Transpacific Systems, 2001-Present
RFS Year System Capacity (Tbps) Length (kms)
2008 TPE 25.6 16163
2009 AAG 28.8 20547
2010 Unity 76.8 9486
2016 Faster 60 9000
2017 SEA-US 20 15400
2018 Hawaiki 67 15000
2018 NCP 80 13618
2019 JGA North 24 9500
2019 PLCN 144 12900

The Transpacific market has been like that of the Transatlantic in recent years, showing relatively little growth year-upon-year. New systems have been added sporadically, however most of the capacity increases have been from upgrades. Lately, OTT providers and those seeking route diversity have been driving new system growth.

Figure 69 - Systems in Service - Transpacific

Figure 69 – Systems in Service – Transpacific

early 2000s certainly played a large part in this limited growth, but the fact that there had been no new systems on the Transpacific routes from 2010-2015 is largely due to existing systems being able to upgrade their capacity for relatively little cost and push potential competitors out of the market.

As with the Transatlantic market, until very recently the Transpacific has been almost fully saturated, with little room for growth other than route diversity and cutting down on existing latency. Lately, however, new systems are being explored in a similar manner to the Transatlantic with the region seeing at least one new cable every year since 2016. Demand from OTT providers and desire for route diversity are the primary drivers behind these newer Transpacific systems. As a result, there is a potential explosion of growth possible through 2022.

8.2.2 Future Systems

Table 6: Transpacific Planned Systems
RFS Year System Capacity (Tbps) Length (kms)
2020 BtoBE 108 16000
2020 HKA 80 13000
2020 Jupiter 60 14000
2021 SAPL 30 17600
2021 Southern Cross NEXT 72 12500
2022 Asia South America Digital Gateway 25000
2022 Australia – New Zealand – Chile 12000
2022 H2 Cable 21700

No systems were added at all to this region from 2010-2015. Since then, the region has experienced steady growth with at least one system added each year for the period 2016-2019 and eight systems planned through 2022.

Figure 70 - KM Added - Transpacific

Figure 70 – KM Added – Transpacific

The amount of cable in the region nearly tripled during this period of growth and has seen over 120,000 kms of cable added since then. (Figure 70) Average system length in the region is just under 16,500 kms, owing to the Transpacific region having some of the longest routes in the world. Between the massive systems required to span the region, and the easy availability of cheap capacity upgrades, the historically static nature of the region comes as no surprise. Recently, however, there has been a noticeable uptick in system activity.

Figure 71 - Contract in Force – Transpacific, 2020-2022

Figure 71 – Contract in Force – Transpacific, 2020-2022

There are currently eight planned systems set to be ready for service for the period 2020-2022 and only 25 percent of them have achieved the CIF milestone – a far cry from last year’s 56 percent CIF rate. (Figure 71) Nearly all these systems are trying to bring large capacity increases along their respective routes, but many of them are directly competing along the same or similar routes. With the average system length of all planned systems for the Transpacific market remaining around 16,500 kilometers, shorter cable lengths are not necessarily possible for systems that are exploring new routes.

These new systems provide a bonus of increased route diversity – especially along the southern part of the region. A few of the systems that are not yet CIF are backed by OTT providers. This takes them out of direct competition with other planned systems and removes some of the financial risk from having to sign on outside investors.