Written by Keith Schofield, January 26, 2012
New evidence is coming to light that the squeeze we predicted on the availability of submarine cable maintenance vessels is now causing concern among owners. Pioneer's independent maintenance ship utilisation analysis is shining a light on the true picture. Every ten years carriers are installing enough extra undersea cable to get to the moon, yet the world's maintenance vessel fleet is quietly getting older and sparser, as will likely be debated at April's ICPC meeting. Carrier concerns were expressed at PTC2012, but revenues are under pressure from their customers. The numbers don't add up.
Undersea cables 'mesh' together to power today's internet, a vital global resource for commerce, computing and communications. Increased stress is put on the rest of the network when even one of these links goes down. However, the 'free internet' business model yields increasing reluctance to pay for the vital infrastructure that powers, protects and repairs the internet. To save money, there is a big squeeze on maintenance budgets. Delayed repairs risk the global internet backbone becoming less resilient. Due to the strategic nature of these links, this problem may ultimately attract Government attention.
Modern, reliable and available vessels are increasingly needed to repair cables that have been damaged. We see the opposite trend. Despite some exceptions, the world's ageing cable maintenance vessels are being replaced too slowly. We're seeing the trend toward private companies moving in to challenge existing undersea cable maintenance 'clubs,' but isn't it all too little too late?
Said Pioneer Managing Partner
"With global capacity rising at 50% per year CAGR, in 2012 we're especially seeing increased upgrade and undersea telecom cable build activity in the Asia-Pacific region, yet few operators are showing signs of being able to fund the required investment in marine maintenance vessels. We're heading for a crisis if nothing changes."
Over the past 10 years, maintenance vessels have declined from 23 to 21. They average 21 years old, from ASEAN Explorer (10 years) to Chamarel (38 years). In that time, undersea cable kilometers have increased by 55%, and capacity by orders of magnitude. Before 2015, another 200,000 route kilometers are planned.
So, owners have fewer choices to secure their networks just at the point they need it most - when a cable goes down.
Continued Co-Managing Partner
"Increasingly this is a gap no-one seems willing to pay to fix. A new deal is needed that works for end users, content providers, carriers and maintenance vessel providers. If we want reliable networks powering the internet as an essential global asset, we must innovate, plan and pay now, or we'll all pay more later."
Pioneer Consulting is an international telecommunications consulting, engineering, and market research firm. For more than a decade, Pioneer's accurate, insightful, and thorough advisory services have provided clients with objective and independent guidance in support of their goals. Pioneer's capabilities range from market analysis and feasibility study, through system design, engineering and supply, to project implementation.