In January 2007, T Soja & Associates published its annual review and forecast of the submarine cable market. In that report, the TSA Radar Screen Report™, we predicted that 2007 would be an extremely strong year for the submarine cable industry – not just part of a continued recovery, but potentially a return to “boom” times for suppliers.
How much better? Check out these numbers. In just the first four months of 2007, contracts have been awarded for more kilometers of submarine cable than in the last three years (the “recovery” years of 2004-2006) combined and total well over ten times the amount of cable-kilometers contracted for during the previous three years (the dreadful “drought” years of 2001-2003). And combining the six years of “recovery” and “drought,” the contracts awarded in 2007 through April come within a few hundred kilometers of the combined total from 2001-2006 (see figure below).
cable-km
Industry Update
Well, during the first four months of 2007, we have seen nothing to throw cold water onto that optimism. 2007 is already, only through April, a better year in terms of the volume of supply contracts that have been awarded than the industry has seen in the previous six years.
By
John Manock
70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2001 through 2003
Before we at the numbers in more detail, let’s take a quick look at TSA’s methodology. First, we are looking only at commercial telecom projects, not energy-related projects that have a telecom component. Second, we are looking at the dates in which the contracts are “formally” announced by the participants. For example, it was widely reported as early as the summer of 2006 that the EASSy consortium had picked Alcatel (now AlcatelLucent) as its supplier based on verbal statements made to journalists, but it was not until March 2007 that Alcatel-Lucent made an official announcement, so we use the March 2007 date. There are always exceptions to rules, and we have made one in the case of a contract that has been signed in 2007 but is under a strict NDA from the client. This project is included in our calculations as we have it from an impeccable source and construction of the project is well underway. Other than this one exception, all of the project dates referred to in this article are from the first official announcement in the form of a press release or website posting from the customer and/or supplier. Now getting back to the numbers, in January, TSA projected that in 2007, on average, the industry would see at least two submarine cable contracts awarded per month, totaling between 100,000 and 150,000 cable-kilometers. The first four months of 2007 have seen a slightly higher pace of awards, with 10 contracts announced totaling just over 60,000 cable-kilometers. These include two transoceanic (18,000-20,000 kilometer) systems, two large (9,00010,000 kilometer) regional systems and
2004 through Jan-April 2007 2006
Figure Contracts Awarded 2001-2007 by Cable-km 15