ANALYTICS
BY KIERAN CLARK
FINANCE & LEGAL UPDATE
W
elcome to SubTel Forum’s annual Finance and Legal issue. This month, we look at the industry’s current finance and ownership status and see what the future might bring. The data used in this article is obtained from the public domain and is tracked by the ever evolving SubTel Forum Analytics Submarine Cable Database, where products like the Submarine Cable Almanac, Submarine Cable Map and Submarine Telecoms Industry Report find their roots. It has been a full year since our last look at the financial situation of planned systems around the world. New systems have been announced and planned systems have gone into service, while others have been delayed or changed. Quite a lot can happen in one year, and this year was no different. Since 1991, $42.4 billion has been invested in submarine fiber optic telecommunication cables — comprising nearly 1.2 million route kilometers — annually averaging $1.46 billion worth of investment and 41,330 kilometers of deployed systems. Historically, consortia/multiple owners have been responsible for the bulk of new system investment. However, in recent years there has been a noticeable shift towards more private and Multilateral Development Bank (MDB) investment. (Figure 1) The way systems are being financed sustains a shift towards single owners.
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SUBMARINE TELECOMS MAGAZINE
This trend was first observed in 2015 and has since continued to move in this direction. Over the next several years, only 36 percent of systems will have multiple owners, 10 percent will
involve MDBs and the remaining 65 percent will have a single owner. While multiple owners reduce the financial risk to any single owner should a cable system fail, single ownership
9% 23%
MDB Multiple Owner Single Owner
68%
Figure 1: Financing of Systems, 2015-2019
20
Multiple Owner Single Owner
15 10 5 0
2020
Figure 2: System Ownership Type, 2020-2023
2021
2022
2023