SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 8: REGIONAL MARKET ANALYSIS AND CAPACITY OUTLOOK

Insider Perspective

Within the submarine cable industry, Regional Systems are at the same time a unique challenge and a strong indicator of the tendency of the global market.

Because they connect various and different countries and markets, they bring much more complexity and problems to be solved than any single point-to-point system. This is one of the main reasons why they present a unique and difficult challenge.

Each country is obviously different with its specific population, habits, social norms, services needed and specific expectations from any new submarine cable landing in the country.

On top of that, laws are never the same from one country to another and getting a permit for each landing of a regional system is always a new adventure. To bring more complexity, the laws may change during the lifetime of the project and the politicians and governments in power in each respective country may also change.

But the markets that the new systems are supposed to link are also subject to potential big changes. The local economy of each country may flourish or not and accordingly, the demand in data to be transferred may vary. As an example, some systems have indeed been recently promoted on the basis of a similar growth for each of the market they were connecting but as one of this market was suddenly hit by an economic and financial crisis, the whole business model of the system was suddenly drastically modified and had to be reconsidered accordingly.

On top of this unique challenge, Regional Systems are also a very interesting and strong barometer of our global submarine cable market evolution from a geographic and an economic perspective.

Patrick Faidherbe, Founding Partner, AQEST

Patrick Faidherbe, Founding Partner
AQEST

Geographically, the impact of regional systems isn’t indeed limited to the region itself. In particular, the success of a regional system may surely affect the regions role in the larger cable net. As an example, this is particularly obvious with the whole European Nordic region with more and more projects being announced and developed in the last months in Denmark and Norway thanks to those implemented previously in Finland. And one can already anticipate that this will help to contribute to the future development of the Arctic region.

Economically, because most of the Regional Systems are at the moment developed and proposed by the Content Providers which are looking for connecting their own Data Centres, they fully confirm this trend of our industry that has been in place for the last five years. Any change of this trend will certainly be seen through a change in the ownership and approach of the Regional Systems.

In summary, each region is unique, and a Submarine Cable System will not only affect the region it belongs to but others as well. Then, compiling the following studies of the regional systems will provide the trends for the Submarine Cable System Industry in its entirety.