The season for subsea cable upgrades

The season for subsea cable upgrades

With a number of submarine cable projects such as the Emerald Express Trans-Atlantic Cable System by Emerald Atlantis not progressing as anticipated in 2012, it has been a challenging year for the capacity segment of the market.

But while new projects are encountering difficulties, existing systems have thrived through a vibrant, highly competitive upgrade market.

The techniques that companies such as Ciena, Infinera and Xtera have developed to convert decade-old cables with limited capacity to mega-light streams through such technologies as coherent transmission have been nothing short of amazing.

And this apparently is just the cusp of a much greater wave of development; all of which appears to be coming at a loss for the development of new submarine systems, which it seems now only have a solid business case if they are built where no-one has built before.

In the future will there even be enough demand to keep all the submarine system suppliers in business? Compounding this is another challenge they face from the upgrade suppliers, as these organisations continue to produce the most advanced terminal equipment.

The strength of the system suppliers is in their marine plant portfolio – cable and repeaters – rather than their terminal plant so could there be a merger in the market to obtain the best of both worlds? How many cables will there be where the purchasers ask for the marine supplier to use a different suppliers’ terminal equipment to its own? Could this be the catalyst for any mergers in 2013?

2012 has seen much talk about the upcoming O3b constellation of satellites offering a low latency alternative to geo-stationary satellites, and even submarine cables. 2013 should see the arrival of this project and it will be interesting to see how well it competes technically and commercially.

It has a niche product targeted at the emerging countries, but the question remains, are there enough niches to make it viable? And if the company is successful in stimulating new growth, will it have the capacity to meet that demand over time, or will the market outgrow it and turn to fibre to service its needs?

These will be just some of the topics discussed at this year’s Capacity Asia in Bangkok, providing a stimulation which flows into the annual PTC conference in Hawaii in January. And for the submarine cable folks, the conference programme will continue in Paris in April with SubOptic.

So the next six months should see a wealth of healthy discussion as a platform for setting the direction for the next few years. I always look forward to this time of year to re-ignite the brain cells and open the mind. I hope you will join me at Capacity Asia and the subsequent events.

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