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Subsea cables: Key to a more connected world

Submarine cables are a vital conduit that connects continents and enables the exchange of vast amounts of data and financial transactions. Their development spans years and their benefits may not be immediately realized by these pioneers, but submarine or sea cables hold the key to supporting a more connected world.

05 / 25 / 2023
4 minute read
Subsea Cable Image

Today, there are over 1.3 million kilometers of subsea cables, delivering over 3 Petabits of data and facilitating more than 10 trillion dollars in daily financial transactions. These figures are staggering compared to just a decade ago, but they fall short of the future demands that lie ahead. With data growth projected to exceed 10 Petabits in the next decade, our current subsea capacity will become overwhelmed. We must continue to support new subsea cable projects to meet this escalating demand.

Several critical factors put pressure on our submarine cable system capacity:

  1. Over 30 submarine cable systems, some of which have been in operation for over 20 years, are nearing their theoretical end of life. While technological advancements may make extending some of these cables financially viable, the majority will need to be retired.
  2. Recent geopolitical concerns have halted the development of several Asia-Pacific cables, particularly those connecting to China or Hong Kong.  This puts additional strain on Asia-Pacific capacity, which is expected to outpace other regions.
  3. Economic pressures, especially in the high-tech sector, make it challenging to attract the necessary funding and investments required to keep up with demand. The industry estimates it needs $30 billion or more to meet the growing requirements.
  4. Environmental concerns have restricted the landing options for submarine cables, limiting the availability of safe and secure endpoints.

Building a single submarine cable is an immensely complex and costly endeavor, often costing hundreds of millions of dollars. It involves extensive planning, licensing, coordination with local agencies and management of technical components. Typically, it takes 3-4 years to complete the cable and another 5-7 years before it starts yielding returns on investment. In essence, it is a challenging and risky undertaking, but the potential rewards can be substantial.

Data centers play a crucial role in the ecosystem created by submarine cables, as they provide the connection point for customers to access the bandwidth across vast oceans. Their partnership and support for new cable developments are vital as demand and the need for connectivity become increasingly critical.

A Cable Landing Station (CLS) is no longer just a termination point on the shore; it has evolved into an integral part of a larger ecosystem that can only be sustained by a data center. By locating termination gear in an inland data center, an ecosystem was formed, attracting carriers, customers, and new subsea cables. This innovative approach proved beneficial for all parties involved and became the new model for subsea cable termination. Hillsboro is a prime example of how proximity to subsea cables and the connectivity they offer has fostered explosive growth in the data center market over the past seven years. This connectivity is essential to meeting the global demand for data.

Many subsea cables are consortia owned by various companies, with each entity possessing a fiber pair for transmitting data through light signals. Recent builds have included large tech companies, utilizing some pairs for their own needs while making other pairs available to carriers. This arrangement reduces the extreme costs associated with submarine cables, enables a larger ecosystem, and benefits data centers by attracting more customers.

As the demand for more subsea cables continues to rise, it is crucial for data center operators to be part of the solution and collaborate with the planning of new cables. Operators must also understand the challenges faced by cable builders and the significant lead times involved. In a landscape where building subsea cables presents numerous hurdles, the establishment of a cable landing station coupled with a data center operator should not be one of them.

The result of these efforts benefits our interconnected world and facilitates the ongoing growth of intercontinental data traffic. Data center operators and submarine cable providers are building for the future, even though it may take decades to realize the full benefits.

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