Infrastructure developments – by sea, land and sky
01 January 2009 |
Here we look at the major developments – under the sea, on land and in space – set to go live around the world over the next year or two, and consider their likely impact.
The reach of communications networks continues to extend even into the most marginal corners of the global economy, connecting businesses and empowering citizens as it goes. At the same time, in more developed regions, increasingly rich and data-hungry applications are being supported by unprecedented levels of infrastructure spend.
Subsea sector developments
A record year for the award of new subsea cable contracts in 2008 will result in a steady flow of new systems going live over the next couple of years, says Gabriel Ruhan, CEO of cable construction company Global Marine Systems. “The industry saw contracts awarded for something like 150,000km of cable in 2008, compared with around 5,000km in 2003,” he says.
On the basis of agreed contracts awaiting fulfilment as well as those at planning stage, and the finite number of appropriately-equipped vessels available to carry out the work, Ruhan expects around 80,000km of subsea network to be laid annually for the next few years. “There are only so many cable laying ships in the world – around 45 in total – so more than this is not possible,” he says. “Some of these ships are for maintenance only. Around 15 are capable of laying the larger cable systems.”
Ruhan foresees Asia-Pacific as the hottest region for new cables coming online during 2009 and early 2010: “We’ll see about four or five new trans-Pacific cables, or new legs of existing cables,” he says.
Not least of these will be the Asia America Gateway (AAG), set for launch in mid 2009. AAG will connect Malaysia to the US via Singapore, Thailand, Brunei, Vietnam, Hong Kong, the Philippines, Guam and Hawaii. It is being funded by a consortium of 10 parties, namely the Government of Brunei, AT&T, Bharti Airtel, CAT of Thailand, PLDT of the Philippines, Indonesia’s Telkom, Telekom Malaysia, Telstra, Starhub of Singapore and VNPT in Vietnam.
Another trans-Pacific system that has attracted much attention, and which is likely to follow hard on AAG’s heels, is the Unity cable, backed by Google along with other partners including Bharti Airtel, Singtel and KDDI. Unity will run from Chikura in Japan to Los Angeles, and have a total potential capacity of 7.68Tbps.
Pipe Networks is shortly to start work on a cable running from Australia to Guam in the Pacific, while Telstra is investing in a rival system from Australia to Hawaii to reduce its dependence on other cables. Also set to enjoy a wealth of new infrastructure is the route from the Mediterranean to Asia, in particular India, picking up the Middle East and Africa on the way.
The Europe India Gateway (EIG) cable system is set to be operational in early 2010, and will connect 13 countries on three continents. Landings are planned for the UK, Portugal, Gibraltar, Morocco, Monaco, France, Libya, Egypt, Saudi Arabia, Djibouti, Oman, the United Arab Emirates and India. Set for launch in a similar timeframe is Orascom’s MENA cable, linking Egypt with Italy and Saudi Arabia.
The other transcontinental cable system of note due to go live in the near term is consortium-backed IMeWe (short for India-Middle East-Western Europe). This will link Mumbai in India with France taking in an array of landing stations in between.
It’s not just these well trodden routes that will get new capacity. Subsea connectivity of world-class quality is set to light up less well served regions too.
“We’ll be able to look back on 2009 as the year when Africa finally gets connected to the rest of the world,” says Alan Mauldin, research director with analyst company Telegeography. “The eastern side of the continent in particular is going to see a number of developments, first with the Seacom and Teams cable systems. On the west coast, there’s Globacom and its Glo-1 cable. All these should go live over the next year. They will be the first new major African systems since Sat3 in 2002.”
At some point in 2010, says Mauldin, the long-awaited East Africa Submarine Cable System (Eassy) should also see the light of day, competing with Seacom and Teams but not likely to enter service until after those two, despite being announced first. “I predict there will be plenty of demand for Eassy,” he says. “There are other cables planned for the west of the continent, and I think they will find customers also. One major cable system is all very well, but you need more than one to give the required level of reliability. After the current spate of new African cables, I don’t think we’ll see any others for a long time. It’ll be a matter of upgrading ones that are there.”
Plenty of smaller systems will also be having a significant if more localised economic impact in the next year or two, says Mauldin. He points to regional systems like Tata’s TGN-Intra Asia Cable linking Singapore, Hong Kong and Japan, with an additional connection planned to the Philippines and possibly also to Vietnam. Combined with the Tata Indicom Cable System (TIC) and the TGN-Pacific cable system, the TGN-Intra Asia Cable will put the finishing touches on the company’s plans for multi-terabit connectivity from India to south east Asia and on to the US.
Global Marine’s Ruhan says a number of island communities around the world are going to benefit from a major boost in international bandwidth over the next few quarters. “We’re going to see cables landing in Madagascar and Mauritius,” he says. “And the Palapa Ring project will connect up Indonesia – around 30,000km of network in total, both subsea and terrestrial. It’s being funded by seven different Indonesian telcos.”
Such is the current boom in subsea activity that there seems hardly anywhere in the world exempt from the reach of new cables. Tele Greenland has commissioned a 4,600km submarine cable linking the country to Iceland and Canada. The Greenland Connect network will run from capital Nuuk to Milton in Newfoundland in Canada, with another leg from Nuuk to Iceland.
In Europe, Interoute is working with Maltese telco Go on the Go-1 submarine cable project which will revolutionise communications in what has been one of the EU’s least connected members.
Russian alternative telco Company TTK (rebranded from Transtelecom) has only recently gone live with its first foray into subsea networks. The Hokkaido-Sakhalin Cable System (HSCS), constructed in partnership with Japan’s NTT, runs from Nevelsk in Russia to Ishikari in Japan. Now Company TTK says that a new submarine cable should soon be underway connecting the Russian mainland to Japan, but on a different route for the sake of diversity.
“We’re in discussions with NTT at the moment,” says Company TTK senior VP of international sales and marketing, Igor Kelshev. “Ultimately we’ll have a three ring topology to provide for the future of connectivity between Japan, Hong Kong and Europe.”
With the pricing meltdown of the early part of the decade now a memory, even the Atlantic may soon be getting new cables, says Mauldin. “The Atlantic will be an interesting route over the next couple of years,” he says. “It has more capacity than any other route in the world, but demand is growing and eating into that. The question is can existing cable systems be upgraded beyond what was initially planned for, or will we need new cables? Less than 30% of Atlantic capacity is currently lit, but with demand growing at 30% to 40% per year, spare capacity is being eaten up fast.”
Of the wealth of subsea cables set to reach fruition over the coming months, many have a terrestrial dimension included in the project. Part of the blueprint for east Africa’s Eassy cable, for example, includes a backbone fibre connection to landlocked countries like Rwanda and Burundi.
Terrestrial infrastructure projects going live in the near term can be divided fairly neatly between brand new build aimed at bringing less developed regions into the fold for the first time, and work in mature economies intended to bolster existing networks to cope with surging traffic volumes.
“The financial crisis does not mean the end of global infrastructure development,” stresses Kelshev of Company TTK. He says that Company TTK has a lot of fibre investment planned over the next year or two to reach out to parts of Russia as yet untouched by the broadband revolution: “Over the next three years we’ll be building 30,000km of metro networks in a number of Russian cities to serve multinational enterprise needs,” he says.
Company TTK’s other mission is to fortify the land bridge it currently offers between the Far East and Europe which it is pushing as a favourable alternative to subsea routes: “Since the major undersea earthquake off Taiwan, people think differently about subsea,” he says. “They want diversity in the form of a terrestrial alternative between Asia to Europe.” He says Company TTK is planning a great deal of investment to boost its international credentials: “We’ve got a new office in Hong Kong, and will be establishing PoPs in Los Angeles and New York during 2009,” he says.
There are plenty of telcos that similarly see themselves as the spearhead for improving their nation’s international standing, and are making investments to match.
“I believe India is perfectly positioned geographically to be the main communications hub between centres like Hong Kong and Singapore in the East and Europe,” says Ajay Chitkara, COO for global data for major Indian player Bharti Airtel. “To help India to be a hub for its own region we are building terrestrial connections with our neighbours. We are already connected with Pakistan and Nepal, and will soon have a land connection with China, and some time after that with Bangladesh and Bhutan.”
Tony Kalcina, CEO of vendor Clarity International, says that India has been and will continue to be one of the major world centres for investment in new infrastructure as it tries to connect its huge and widely distributed population.
He says Clarity is working with Indian carrier Reliance Communications to ensure that the next generation of infrastructure to go live proves profitable for the company despite the low ARPU of the Indian market, estimated, he says, at a mere $8. “Trying to reach rural populations brings its own difficulties,” he says. “India covers more than three million square kilometres, including a great deal of rough terrain, and 70% of the population lives in rural areas, with a teledensity of just 2%. Any network covering such a geographical space must rely on automation and the intelligent central management of manual activities such as we are providing for Reliance.”
Progress towards wider broadband penetration in emerging economies in Asia, Latin America and Africa over the next year is going to centre around wireless options like 3G and Wimax, leapfrogging the inevitably slow expansion of wired services. Vendor RFS is working on new unwired infrastructure around the world, says Daniel Wojtkowiak, global product manager. “We’re in India and Asia-Pacific as well as Latin America, and Europe too,” he says. “We do high capacity backhauling products. India currently most needs a cheap service to get people into the voice side. In Europe our work is about moving to 4G, as voice alone is just not enough any more.”
Paul Indoo, manager of product marketing at vendor Nortel, says that the heaviest terrestrial investments he sees on the horizon are in more developed countries, where existing networks are being stretched to the limit by growth in usage volume. Major networks in mature telecoms markets all over the world are being updated to increase their long-haul capacity from 10Gbit/s per wavelength to 40Gbit/s (40G), he says.
As an example of this new wave of terrestrial build he cites KPN Belgium which is about to enhance broadband services across the country with a 40G-ready optical fibre network. “KPN plans to use this backbone to meet increasing demand for bandwidth-sapping applications for business and residential users such as corporate VPNs, storage solutions and Internet video,” he says.
In Russia, fibre network operator Rascom is also getting ready to launch a 40G Nortel-built network. “This will be one of the largest data pipelines in eastern Europe, delivering 40G connectivity among sites in Moscow, St Petersburg, Helsinki and Stockholm,” says Indoo.
Naturally other vendors are engaged in similar work. Huawei is about to start constructing China Unicom’s first 40G fibre network, to serve five major cities in Northern China, and centering around Beijing. And in Brazil, another fast-developing economy, Internexa will be extending its Electro Sao Paulo terrestrial network.
Access as well as backbone networks are going to be on the receiving end of huge investment: “Incumbents, alternatives and mobile operators are building higher speed wireless access, ranging from 3G HSDPA to 4G in the form of forthcoming LTE,” says Indoo. “They are also going to be busy with higher speed fixed access, in the form of ADSL2+, VDSL and fibre to the premises which are enabling more demanding applications such as hosted business VoIP and multimedia and high quality, interactive real-time video.”
Andrea Casini, VP of sales and marketing with global wireless infrastructure supplier Andrew, says the main terrestrial investments he foresees coming into effect over the next year revolve around improvements to wireless infrastructure rather than totally fresh build.
“In western Europe, mobile access networks are reaching maturity,” he says. “Typical penetration levels are around 100%. Coverage is not really an issue. Adding revenue has been about tweaking and optimising, and also deploying in-building systems. We’re doing in-building work in countries like Saudi Arabia and Dubai where there are a lot of new high-rise structures going up.”
Much work on wireless infrastructure, he says, is about adding additional backhaul options: “Microwave backhaul has increased dramatically over the last year in western Europe,” he says. “In emerging markets over the next year or two, by contrast, it’s about coverage and footprint. We’re going to be seeing a lot of new Wimax in particular countries – not only in developing economies but also in places like Italy where there’s a lack of wireline in mountainous areas.”
This growth in infrastructure will be matched by the need for management of data, says Rami Avidan, CEO of Wyless. “In Europe, we have seen, and expect to continue to see, great demand for data management, as well as for managed services. I expect that this increase in demand will continue, in particular in the UK, Spain, Germany, Scandinavia and the Baltic regions, as the need for wireless connectivity grows and the advantages of an open platform for data manageability are realised.”
“At the moment it’s all about preparing networks for future user demand,” confirms David Taylor, technical sales manager with network vendor Fibre Technologies. “Virgin is projecting 50Mbps transmission speeds soon, up to 200Mb by 2012. BT is looking into deploying fibre everywhere. Meanwhile people are turning to us for DWDM to help them get more out of their fibre. Service providers must invest now or otherwise when the recession ends they’ll suddenly find themselves behind the game. Big players can keep spending up, small ones will be mopped up and disappear.”
The continued roll-out of BT’s 21 Century Network, both at home and around the world, will be one of the terrestrial highlights of the next year or two.
Innovations in satellite
There is a key role for next generation options like 3G and Wimax in helping to bridge the divide between digital haves and have nots, and even plain old 2G in extending access to voice services. But whole swathes of the planet are well away from any base station or tower, and rely on satellite links, both for access and for backhauling traffic to the global grid.
But services based on satellite are expensive, barely touching on the lives of the estimated three billion people in the world with no proximity to any network. “There are satellite industry developments on the horizon that have the potential to change a lot of things,” says Max Engel, strategic analyst for the satellite sector with Frost & Sullivan.
This potential, says Engel, rests with Google-funded O3b Networks which has plans to launch 16 equatorial satellites. O3b claims these will provide an affordable service for Africa, the Middle East and parts of Latin America.
“We’re going to be delivering affordable low-latency, high-bandwidth IP connectivity to developing and emerging markets,” says Mike Serrano, director of marketing for O3b. “For these markets, the challenge isn’t the ‘last mile’ but the first 5,000 miles between the tower or networks and the global fibre network. For many of these markets, fibre connectivity isn’t an option.”
The constellation that O3b has under construction will follow a mid-earth orbit (MEO) which Engel says is a happy trade-off between the geostationary earth orbit (Geo) satellites that currently provide the remoter parts of the planet with their connectivity, and those in low earth orbit (Leo). “Geo satellites are far enough out for the speed of light to cause latency problems,” he says. “Leo satellites have no delay, and use less power, but tracking them is an issue. You need lots of Leo satellites to keep a connection going. Meo is high enough that you don’t need many of them, and low enough not to use too much power.”
The new O3b satellites will offer backhaul and internet trunking, matching the price of existing microwave backhaul, claims O3b. “If this turns out to be the case, and it’s not unthinkable, then it will change everything for those parts of the world which are not going to get fibre any time soon, provided they are not too far north,” says Engel. “Traffic can bounce from rural South Africa, for example, and down to Johannesburg where it connects to a fibre network. You’ll be able to put cell towers anywhere and the economics won’t be awful.”
This is potentially good news not only for the developing world, but the developed too for instances where it might be useful to place cell towers well away from other communications assets, he says.
“It could be a game changer, not necessarily replacing other forms of satellite communications but certainly boosting the overall volume of satellite traffic,” he believes. “People who currently are resigned to getting data over a spaghetti straw will suddenly have a huge pipe. Everything else that’s new in the satellite industry is incremental change besides this – chicken feed.”
He expects that, if successful, O3b’s market entry will change the broader communications industry too. Bringing many millions of new users online will have a big effect upstream, he says. “We are complimentary to the wholesale communications market as we can pull traffic out of locations that currently have no access to the wholesale market and we put traffic over those networks. We also provide a diverse path and diverse technology to the wholesale market.”