UNLOCKING THE BROADBAND OPPORTUNITY Middle East, India and Asia Lead the Way in Submarine Cable Industry Recovery
The submarine telecom cable industry is passing through one of the most difficult periods in its history since it came into existence in 1851 with the laying of the first undersea cable between Dover and Calais. It began when the industry was driven to massive investment in the 1990s to meet the expected global demand being created by the combined forces of the Internet, industry deregulation and strong capital markets. It reached crisis level during 2002 when the bursting bubble left over-leveraged companies with unwanted infrastructure, rapidly falling return and market capitalisation heading towards zero. Since then the industry has been in the process of restructuring, and while some markets remain in the doldrums, others are powering ahead. Problems of overcapacity remain on the overbuilt routes across the Atlantic and Pacific, but in regions underserved by international cable systems, demand is already outstripping supply. Leading this surge are countries in the Middle East, together with India and China, where demand for telecommunications services is forecast to explode in the coming years. It’s a demand being fuelled by increasing use of the Internet, by new broadband services and by global outsourcing of call centres and
By Andrew Evans
www.ptc2004.org Chief Technology Officer, FLAG Telecom 21
back office operations by European and US companies In India, for example, NASSCOM forecasts that bandwidth demand will grow from 7.31Gbits/s in 2003 to 92,56Gbits/s in 2009. While much of this demand will come from increased Internet usage, forecast growth in mobile and fixed services will be substantial, with the number of mobile subscribers growing from the current figure of 30 million to 70 million by 2007, and fixed subscribers growing from 50 million to nearly 70 million in the same period. The accelerating pace of market liberalisation in these regions is also serving to fuel growth in telecommunications. Market liberalisation in some countries has been slow and in a number of cases ineffective regulation of incumbent monopolies has inhibited market growth. However, as was the case in the US and Europe, where there is a strong customer demand for services coupled with the technology available to deliver them, governments are quickly sweeping such growth inhibitors aside. Such explosive growth in demand should not come as a great surprise. When the bubble burst it was not lack of demand for telecommunications services, nor the Internet that caused it. It was caused