Back to the Future Again: The Current State of the Regional Systems Market Purchasers?
One year ago, in SubTelForum’s issue on Regional Cable Systems, we wrote about the future of the industry and the opportunities presented by regional systems. In this article, we will look at what has happened in the past year and where the regional systems market stands. The most striking development in the past year in the submarine cable industry is the number of “real” systems that are under development. By “real” we mean projects that have a good chance of being built in the short term; not the long-term dreams or wishful thinking that seemed to float around constantly during the darkest days of the recent slump.
Regional systems can be grouped into two categories. Large regional systems under development range from 8,000 to 20,000 kilometers in length and usually have many landing points. Smaller “ T h e s e c o n d m a j o r a r e a o f regional systems are up to 3,000 kilometers long and are more often development in the Caribbean is point-to-point.
The definition of a “real” system is, of course, subjective. For the in the islands of the Lesser Antilles. purposes of this article, we are defining “real” as those systems Recently, the SMITCOM cable There are four large systems for that have awarded a supply linking Puerto Rico and St. Maarten which supply contracts have been awarded or will be awarded contract, those that we have entered service, but that was just soon. These are SEA-ME-WE-4, reason to believe will be going the beginning of efforts to improve FALCON, EASSy and Globacom’s to bid this year, or those that Nigeria-UK cable. All four point connectivity to the islands. “ have made substantial progress to two geographic regions that are over the past year. The latter seeing rapid growth in telecom and includes the raising of money, Internet demand – Africa and the Indian Ocean. acquisition of licenses, agreements with incumbent operators and other developments that indicate an At this time last year, supply contracts had just been actively developing project. awarded to the largest of all the planned regional systems, SEA-ME-WE-4. At 20,000 kilometers, SEA-ME-WE-4 Under this definition, there are more than a dozen will connect Singapore, Malaysia, Thailand, Bangladesh, projects underway, totaling more than 50,000 kilometers India, Sri Lanka, Pakistan, United Arab Emirates, Saudi of submarine cable. Of this total, more than 60% is now Arabia, Egypt, Italy, Tunisia, Algeria and France. The under contract. Another 35% could be under contract supply contracts were awarded to Alcatel and Fujitsu in by the end of this year. Considering that the industry April 2004. Installation is well underway in both the installed less than 50,000 kilometers in new construction Mediterranean Sea and India Ocean. during the period from 2002-2004, the systems currently underway represent a sizable growth spurt. And all of this growth is coming from regional systems. At this time last year, there were a few cable systems
by John Manock
under construction. Tata Indicom’s India-Singapore was the longest at a little more than 3,000 kilometers, but the remainder were quite small – less than 500 kilometers. The industry, however, was looking ahead to several large regional systems that showed promise. These systems included SEA-ME-WE-4, FALCON and EASSy. The promise has begun to materialize as all three have made great strides in the past year.
The next largest system is FLAG Telecom’s FALCON, a 10,000-kilometer system. FALCON will have multiple landings throughout the Gulf region, with submarine links initially stretching to India in the east and to Egypt in the west. Alcatel was awarded the supply contract in 9