FEATURE
BY JOHN TIBBLES
FORECASTING DEMAND FOR SUBSEA CAPACITY
“P
rediction is very difficult, especially if it’s about the future.” So said Nils Bohr, famous Danish Nobel Laureate in Physics, and he was certainly right about that, as anyone reading this article or having had experience with demand forecasting will know. However, as this issue of Sub Tel forum is focused on ‘Capacity’ we should reflect on how it got there and how we can, or indeed can’t, forecast how much capacity will be around in the future. Many would also sympathize with the view of a much respected, now retired colleague, made outside a back-street bar in Hong Kong back in apparently simpler times. His view was, “Telecoms demand forecasts are always right. It’s just the X axis that is wrong.” That was a good while ago, but it has stuck with me ever since. As well as being a witty observation, it has a lot of truth in it. The Dotcom bust situation with network overbuilds and duplication came too early for the widespread adoption of the internet it sought to serve and what we have been seeing in the last few years is in response to the scaling
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back on network investment that followed that unhappy time in our industry; initially a bust followed by a boom. So, with so many projects recently completed and many more in the development stage, just how do you forecast the demand for subsea cables? One could say just build the largest capacity available and if you can afford it there is not much wrong with that approach. Or is there? There is always the awkward question: “where is the money coming from if you are seeking to finance a new build.” Who will buy, how much will they buy, when will they buy and how will they buy, lease, IRU or something between the two?
ONCE UPON A TIME
Once upon a time there were no fibre optic cables, but there were submarine cables. Back in the telegraph days the answer was simple: you had copper wires instead of optical fibres and you could transmit very, very, very slow speed signals, enough for telegraphic communications. No high-tech