Subsea cable spend gathers pace
Around $5.5 billion (€4.1 billion) will be spent in 2012 and 2013 to deploy 33 new subsea cable systems, even though there is much untapped capacity on existing routes, research shows.
The data, compiled by TeleGeography, shows there has been a recent surge in submarine cable construction globally, with 19 systems worth a total of $3.7 billion launched in 2010 and 2011. Already this year, two cable systems have been deployed in the Middle East - Gulf Bridge International and the TGN-Gulf cable which completed Tata Comm's round the world ring.
But according to TeleGeography analyst Tim Stronge, considering that many existing subsea cables are still far from full, it is not a lack of capacity that is driving most cable projects. “Operators are deploying new systems for a variety of reasons, including physical route diversity, latency reduction, strategic advantage, and the lure of relatively high price margins on some routes,” he says.
Upcoming Asian cables include the Asia Submarine-cable Express - due to be deployed in 3Q this year - and the Southeast Asia Japan Cable, which is scheduled to come on line in 3Q 2013.
TeleGeography forecasts that close to $1 billion will have been spent on Asian subsea cable construction between 2010 and 2013, with the vast majority of spending to occur this and next year.
But the region's expected construction costs are dwarfed by Africa, where spending is expected to near $3 billion over the same four-year period.