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 YearSystemCapacity (Tbps)Length (kms)
2008TPE25.616163
2009AAG28.820547
2010Unity76.89486
2016Faster609000
2017SEA-US2015400
2018Hawaiki6715000
2018NCP8013618
2019JGA North249500
2019PLCN14412900

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 YearSystemCapacity (Tbps)Length (kms)
2020BtoBE10816000
2020HKA8013000
2020Jupiter6014000
2021SAPL3017600
2021Southern Cross NEXT7212500
2022Asia South America Digital Gateway25000
2022Australia – New Zealand – Chile12000
2022H2 Cable21700

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.