Ever-Rising Need for Fiber Optics to Support Exploding Bandwidth Demand Drives the Global Submarine Optical Fiber Cables Market

Submarine Optical Fiber Cables route kilometers laid annually worldwide is projected to reach 53 thousand kilometers by 2022, driven by increasing demand for data, rising trend of connecting new points, and the emergence of new cable ownership patterns.

Modern day economies, societies, and businesses have become increasingly dependent on uninterrupted global data connectivity. With the growing demands of high-performance computers, servers and network storage systems, there is an ever-rising need for fiber optic interconnectivity to support the growing demand for bandwidth. Submarine cables are designed for ultra-high speed real-time transfer of data across continents, countries and cities, and are essential for transmitting data and voice communications across the world, presently carrying about 98% of all voice traffic, and virtually all internet traffic across continents. Submarine Optical Fiber Cables dominate international voice and data traffic, due largely to the advantages offered in terms of high reliability, security and capacity, cost-effectiveness on major routes. The growing prominence of Cloud and Big Data also necessitates high degree of investments into data centers dispersed across the world. For cloud and big data concepts to be realized, telecom sector requires strong connectivity between these data centers.

There has been sharp and steady growth of bandwidth demand across the world, with every region experiencing compound annual growth of over 40% in international bandwidth use between 2011 and 2015. Asia, Oceana, and Africa experienced nearly 50% growth during the same period. Along with regional demands, bandwidth use is growing by approximately two times every two years. Upgrades are also keeping pace with this growth to a great extent. The percentage of potential capacity versus lit capacity is fairly stable, except for the short-lived crunch on the transatlantic route during 2008-2010. Few new networks were built during the last 5 years. With the exception of some spike in deployments during 2012, operators largely kept pace with aggressive growth of bandwidth demand in submarine optical fiber cable network by upgrading existing systems. Among new systems coming up in the near term, much of the development is derived from webscale companies that are emerging as high bandwidth consumers. The undersea bandwidth consumed by these companies is more than by anyone else on major routes. Such increasing bandwidth requirements led many webscale content providers to evolve from being customers of submarine cable systems to owners.

The submarine communications industry of today is well-informed and innovative, implementing practical and versatile solutions in markets that are increasingly demanding as regards cost-efficiency, connectivity, and reliability. Continued advancements in technology, with capacity and affordability as the major aspects, are expected to play critical roles in the industry's future growth. The industry is now in the process of putting into operation 100G wavelengths across almost the entire transoceanic route, and this ensures that the future would be one of connectivity based development. The 100G cable, with its 8-10 terabyte capacity and cost-effectiveness, represents a good taking-off point. Moreover, the successful trials conducted in 2014 for long-haul 400G wavelengths prove that suppliers could expect commercially available terabit wavelengths within the next few years. In addition, some researchers working on next generation fiber optic technology recently broke the fiber network's world speed record by making 255 terabits per second possible through a single strand of glass fiber.

Currently, only 15 countries and territories in the world still lack international fiber connections, and hence there might not be much room for growth. However, repairs and upgrades would continue even if there are no new builds. The expected life expectancy of submarine cables is nearly 25 years, and this means that there would always be requirements for repairs, upgrades or replacements. The industry made large strides in recent years in the complicated and expensive process of subsea fiber repair. Specialized robots are now used by companies for shallow water repairs, while specially designed "grapnels" are deployed to hoist cable during deep sea repairs.

Key players in the market include Alcatel-Lucent Submarine Networks SAS, Ciena Corporation, Fujitsu Limited, Huawei Marine Networks Co., Limited, Infinera Corporation, Kokusai Cable Ship Co., Ltd., Mitsubishi Electric Corporation, NEC Corporation, Norddeutsche Seekabelwerke GmbH, NTT World Engineering Marine Corporation, Orange Marine, S. B. Submarine Systems Co., Ltd., Seaborn Networks LLC, TE SubCom, and Xtera Communications, Inc. among others.

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Source: ASDReports - Market Research
Date: Mar 9, 2018