Orient Link: The latest player in Subsea Asia

Orient Link: The latest player in Subsea Asia

29 November 2019 | Natalie Bannerman

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2019 saw the major rebranding of Nippon Telegraph and Telephone (NTT) with the unification of its 28 international subsidiaries including Dimension Data and NTT Com into a single identity, NTT Ltd.

2019 saw the major rebranding of   Nippon Telegraph and Telephone (NTT) with the unification of its 28 international subsidiaries including Dimension Data and NTT Com into a single identity, NTT Ltd.

Since then, the company has been busy with a slew of new announcements. First with the confirmation of its new global leadership team that includes chairman Tsunehisa Okuno and global CEO Jason Goodall.

One area in which the company has been particularly busy in is submarine cables. In August, the company announced plans to extend it subsea cable network to India. The decision is set to help the company offer bandwidth as well as data centre services, through its subsidiary Netmagic, a provider of end-to-end cloud computing solutions. Once completed the newly expanded network will allow NTT to compete with the likes of Tata Communications, Airtel and Sify, to offer connectivity to the international cable landing station in Mumbai.

Most recently NTT in partnership with the Fund Corporation for the Overseas Development of Japan’s ICT and Postal Services (JICT) and WEN Capital (WEN), established Orient Link, a new subsea cable unit in Singapore.

Capacity speaks to Hajime Miyazaki, director of corporate strategy and planning, NTT Ltd, about the new business and plans for the region. As project leader for Orient Link and board of director for the new company, he shares the key drivers of the new unit and what they hope to achieve with it.

“Our goal with Orient Link is to shorten lead-times to construct subsea cables and enable us to enter the market at the right time. We can simplify decision-making the process since no other carriers are involved in the cable construction and landing,” says Miyazaki.

Unsurprisingly it is the increasing data demands of Asia that made it ripe for investment. In 2018, India was credited with carrying world’s most internet data traffic, approximately 2.1 exabytes a month. Additionally, according to TeleGeography, Asia falls just behind Africa in terms of growth in international internet bandwidth, rising at a 42% compound annual rate between 2015 -2019.

“We chose South East Asia due to the rapid increase of data traffic demands in Asia where digital platformer such as Google, Apple, Facebook and Amazon (GAFA) are expanding their business as well mobile 5G implementations in developing economies,” he continues.

Speaking of the large hyperscalers and content players, Miyazaki recognises the impact these providers are having on the overall market, though he’s rather tight-lipped on whether or not Orient has any plans to work with them.

“In general, OTTs presence is getting bigger in this region together with data centres. OTTs are becoming major partners for telcos to co-build subsea cables but as of now, we cannot disclose any of our partners.”

Much of Miyazaki’s hesitance is centred around Orient Link’s rumoured new cable system that is due for installation in December. The new system to Singapore, which is also Southeast Asia’s financial hub, is due to be completed in two years.

“We are finalising our cable construction plans with a view to start implementation soon. We can’t give any details on where it lands but it will connect to carrier-free data centre, that way an end-to-end service can be served to the customers. We will be making an announcement when that is ready.”

Due to Orient Link’s connection to NTT, the new entity will leverage the company’s existing assets to offer a whole host of added services to its subsea offering.

“Asia has higher growth potential than other regions because it has a large population, which brings huge content demand through mobile services. Orient Link will leverage NTT’s existing data centre presence, which is a top player in Asia’s data centre market. There are also synergies with our existing cable systems and global IP network as well.”

In its collaboration with its co-founders, NTT will s a 42% stake in Orient Link, with JICT and WEN holding 38% and 20% respectively, the $119 new unit. Miyazaki describes JICT and WEN’s involvement as that of investors explaining NTT will be responsible for all operations, manufacturing and sales.

Though he hastens to add that it will not be a private system and that “Orient Link will sell capacity to the customers in the market including NTT.”

No part of the market can ignore the impact of emerging technologies to their sectors. This is also true of subsea. 5%, IoT and AI, to name few will all play its part in the increasing need to infrastructure. A fact that Orient Link is not only aware of but prepared for.

“Those services rely on over the top digital platform therefore subsea infra demand will increase in relation to data centre infra expansion,” he says.

Looking ahead its fair to share that Orient Link and by expansion NTT has a busy few months ahead, and while we wait patiently for word of the new Singapore system to land, 2020 is sure to be good one.