Eastern challenges

10 July 2017 | James Pearce

Eastern European carriers are facing a unique challenge. As the deployment of higher capacity subsea cables running from western Europe to Asia grows, the terrestrial carriers risk losing business.

Yet that is not reflected in demand, despite recent key subsea deployments such as SEA-ME-WE-5 and AAE-1. Why? Because eastern Europe is acting as a gateway for traffic travelling from Europe to Asia and back, with terrestrial cables playing as key a role in the development of the region as subsea pipes.

A panel expressed this view at Capacity Europe East event, entitled "Connecting continents: what role do submarine and terrestrial cables play in uniting European and Asian carrier markets?"

The panel looked at the importance of high capacity and low latency transit routes connecting Europe and Asia in the carrier market. Speakers included Türk Telekom International CCO Stuart Evers, RETN managing director Daniel Jasinski, Retelit chief sales and marketing officer Giuseppe Sini, Colt VP of wholesale, Tim Passingham, and director of international for Azertelecom, Sietse Lettinga.

Lettinga explained that in Eastern Europe, where a number of countries are landlocked, the development of new terrestrial cables, such as China’s Silk Road project, is vital to ensuring redundancy and diversity. "If we look back through history, there have been a number of natural disasters that have led to subsea cables in Asia and Europe being cut," Lettinga told the audience in Dubrovnik.

"If that happens and your customers stop getting service they’ve paid for, you will lose them. And those natural disasters are going to happen again.

"We’re trying to build a network that runs through Eastern Europe that will act as an alternative to the subsea cables. It needs to run through as few countries as possible, and needs to find the fastest ways to eyeballs. So you need a lot of crossroads but both terrestrial cables will play a big role, as will subsea cables."

His words were echoed by RETN’s Jasinski, who said although terrestrial cables do not always compete directly with subsea cables in terms of price, they offer a good alternative option, especially on routes running through Eastern Europe.

"We see new subsea cables being developed every year and that’s fine, but we also see a situation where we expect more terrestrial cables to be deployed over the next few years," he said. "It is more expensive, for sure, and it is difficult to deliver but it is probably the best way to build leverage with the sea cables in terms of growing business with a safer solution."

Colt’s Passingham pointed to geopolitical issues that can also lead to loss of service, such as trade disputes or sanctions, meaning diversity of routes plays a key role in service assurance. He used current the current diplomatic in Qatar to illustrate his point. Countries in the Middle-East, including Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt, suddenly cut diplomatic ties with Qatar in June, citing claiming the country was supporting terrorism.

"There’s obviously the natural disaster side but there’s also a lot of things going on in the world that means you must consider the geopolitical angle. Look at what happened in Qatar recently," he said, referring to Saudi Arabia and other Arab states cutting ties with Qatar. "Those kinds of issues can have a big impact on the carrier business if you have routes that pass those countries." 

Separately, Turkcell has said its $4.2 billion lawsuit against MTN over a disputed licence in Iran is set to go to trial in a court in South Africa.

AAE-1, a 25,000km cable running from South East Asia to Europe across Egypt, was also discussed. It connects Hong Kong, Vietnam, Cambodia, Malaysia, Singapore, Thailand, Myanmar,India, Pakistan, Oman, UAE, Qatar, Yemen, Djibouti, Saudi Arabia, Egypt, Greece, Italy, and France and went live in March 2017.

With a capacity of at least 40Tbps across 5 fibre pairs, AAE-1 is designed from the outset with 100Gbps transmission technology, which may be upgraded in the future to fulfil increasing bandwidth demand. Configured with express routes and the minimum number of hops between Points of Presence (PoPs) in Europe and Asia, AAE-1 is the high performance, economic solution for OTTs, international carrier and enterprise businesses.

Retelit is one of 17 companies involved in the AAE-1 consortium, with CSMO Giuseppe Sini involved in the panel. He said take up of services on the new cable had been strong, showing the growing demand for connectivity in the region. As more traffic passes from Asia to Europe, and travels in the opposite direction, this demand is only likely to grow. This means offering diverse routes is ever more important. 

Topics: Eastern Europe, Capacity media, wholesale telecoms, subsea