By Bertrand Clesca
With seemingly insatiable bandwidth needs across the globe, major content providers (Facebook, Google, and, to a lesser extent, Amazon and Microsoft) are more involved than ever in the building of long-haul subsea cable systems. The traditional large consortium-led model is morphing to a smaller consortium or quasi-private model where content providers are either the direct initiators of the project or the funding customers (also known as anchor customers, committing to purchase fiber pairs and making the project viable). Content provider needs for bandwidth are growing so rapidly that it makes more and more economic sense for these huge bandwidth users to invest in their own infrastructure, whether entire subsea cables or fiber pairs in cables built with co-investors with similar connectivity needs and operational philosophy.
A content provider’s alternative is to buy lit fiber capacity from another company. Usually, this would be a traditional carrier or a wholesale provider, often called a carrier’s carrier – although the name does not quite fit here.
The table below provides a list of subsea cable systems where, based on public data, Pioneer Consulting believes Amazon, Facebook, Google, and Microsoft has invested financially, by being either dark fiber pair customers or (co-)owners of these systems. Cable systems where content providers have purchased “only” managed capacity are not listed here. The subsea cable systems are listed in chronological order of their Ready for Service (RFS) date (actual RFS date for the cable systems already deployed, and planned or estimated RFS date for the future cable systems that were announced or are under construction).
Note: The line between the sale of “managed capacity” and a sale of a “spectrum” is rather gray. To us, “managed spectrum” is a type of “managed capacity.”
|OTT||Subsea Cable System||RFS||OTT||Subsea Cable System||RFS|
|Indigo West and Central Cables||2019||Asia Pacific Gateway (APG)||2016|
|Dunant||2021||Pacific Light Cable Network (PLCN)||2022|
|Pacific Light Cable Network (PLCN)||2022||CAP-1||2022|
|New Cross Pacific (NCP) Cable System||2018|
The lines of the table above cover very different situations. In some cases (like AEConnect-1), the content providers are not co-owners of the cable system but are customers of dark fiber pairs. In other cases, content providers are co-owners of the cable systems with other parties (like the transatlantic Havfrue cable system co-owned by Aqua Comms, Bulk, Facebook, and Google) or the only co-owners (like the future CAP-1 transpacific cable system 100% co-owned by Amazon and Facebook.) Lastly, some cable systems are 100% owned by a single content provider (like the private cable systems recently developed by Google, including Junior, Curie, Dunant, Equiano, Grace Hopper, Firmina, and TOPAZ.)
One important point to make is that, even if Google is developing privately-owned cable systems, some other operators may have access to dark fiber pairs on them. This is what happened for the transatlantic cable system Dunant where the French landing party – Orange – receives two fiber pairs on the Dunant cable system, on an IRU basis. Also, Telecom Italia Sparkle acquired one fiber pair on the Google-owned Curie US-Chile cable.
The cable systems listed above represent a total of about 340,000 km of submarine cable. In 2020 alone, about 27,000 km of cable entered commercial service for the content providers. The year 2022 is projected to see a significantly larger amount of cable systems to be ready for service (up to 75,000 km) as some transpacific cable systems that were delayed due to the deteriorating China-US relations are expected to be lit at this time (activation of some of these cables is still pending on FCC authorization).
For the short term, there are no signs of slowdown in the content provider appetite for new subsea cable systems. One wonders, however, if this purchasing spree is intended to build inventory for the next decade, or whether the building campaign will continue.
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