Upgrades: The Viable Alternative? Mike Hynes – COO, Azea Networks
Substantial investment in new submarine systems during the telecoms boom of the 1990s seems to have ground nearly to a halt as we approach the middle of the next decade. Yet bandwidth demand continues to grow, leading carriers to look for the most attractive options for increasing capacity. Fortunately, there are now alternatives to new build that can unlock substantial capacity while affording the carriers significant economic rewards. This article will discuss the technical and economic implications of upgrading existing submarine networks to deliver substantial capacity increases. What carriers want: incremental bandwidth Competing market pressures are creating a dynamic shift in the way that carriers are approaching the growth of their submarine communications networks. On the one hand, traffic demand continues to grow annually at between 40% and 80%, depending on the route. Whilst this may be modest compared with the peak of the boom, it does however continue to fill capacity on the existing cables, and at this growth rate the currently lit capacity will be exhausted within 2 to 3 years on many routes. At the same time, increased competitive pressures are dramatically driving down revenue per bit carried, which is continuing to squeeze carrier
profits. In many instances, pricing on a route can approach the marine maintenance costs. But the carriers’ dilemma is that while they want to create extra capacity to generate profitable revenue, they are nervous about committing to the sizeable capital investments required to deploy new cable systems. Carriers are therefore starting to look for alternative business models for adding capacity, and are looking to extending the lifetime of existing systems to provide them with the answers. They want to be able to link capital spend directly to actual revenue growth opportunity (rather than uncertain
future predictions of growth). This necessarily requires dramatically reduced planning cycles and lead times. Rather than spend huge amounts of investment in one shot, as for new cable build, they would ideally add bandwidth incrementally in much smaller units (e.g. a single 10G wavelength at a time), unlocking capacity as its actually required.
Technology advances: turbo-charging existing undersea systems This incremental growth model is, of course, the mindset on large ‘Terabit’ cables initially only lit with
Upgrade Beyond Design Limits
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