Broadband Explodes Across the North Atlantic
There is no doubt that 2006 was a very strong year for the submarine cable industry. New systems were announced at an astonishing rate. Supply contracts were awarded and financing for new systems was secured. There was even a return to transoceanic systems – a type of project that was almost thought of as a thing of the past following the collapse of new cable construction in 2002. TSA’s Radar Screen Report™ for January 2007, our annual review and forecast for the industry, has identified 24 major submarine cable projects that were under contract in 2006, up 30% from 2005 and up from just five projects during the depths of the drought in 2003. TSA is also forecasting that as many as two dozen new supply contracts will be awarded in 2007, many of which will be large scale projects in the several thousand route-kilometer range. Supply contracts for more than 100,000 route-kilometers of new cable systems could result. Number of Supply Contracts Awarded by Year
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The new submarine cable projects that are being developed show remarkable geographic distribution. Several transpacific cables are being seriously pursued. There are numerous regional projects planned and underway throughout the Pacific, Indian Ocean and Caribbean regions. One geographic market that is not seeing much in the way of new submarine cable projects is the Atlantic. The transatlantic market was arguably the most overbuilt of all markets during the last submarine cable boom of the late 1990s and early in this century. It was often cited as a leading example of overbuilding in the popular press. With Internet demand lagging, it was believed by many that it might be decades before the huge amount of existing cable capacity across the Atlantic would be used up. The focus of this article, however, is about demand bandwidth, not submarine cables. And as exciting as the announcements of new submarine cable systems were in 2006, some of the purchases of transatlantic bandwidth during the year were somewhat unexpected, if not outright astounding. In February 2006, US carrier Level 3 announced that it was buying 300 Gbps of capacity, with the rights to 300 Gbps more, on Cable & Wireless’ Apollo transatlantic cable. This is believed to be a record for a single purchase of capacity.
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Level 3 said at the time that it had 480 Gbps of traffic on its transatlantic network and that the amount had doubled in the previous 12 months.
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