In 2009, with two new competitors in the market, the total new capacity demand is around 100 gigabits per second. A wavelength to the USA is about US$20M. Summarized in a table, this presents an interesting picture: Year
Demand
Price per wavelength (USD)
2002
10 Gbit/sec
$200M
2007
40 Gbit/sec
$50M
2009
100 Gbit/sec
$20M
What has happened over the years is that the unit cost of capacity has declined in proportion to the increase in demand, while the value of the total market remains static. The Australian public has enjoyed faster and faster connectivity without any increase in the overall cost of international connectivity. The value of the market approximates that which is required for a conservative return on investment of US$200M. These facts are hardly consistent with the extraction of monopoly rents, but rather of a market working extremely efficiently, with growing demand reflected in lower unit prices. As to the “gang of four”, Australia Japan Cable has five owners, and Southern Cross Cable Network has three, with one of those also having a share in AJC. Maybe “gang of seven”, while more accurate, does not ring quite so resonantly.
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Robin Russell has over thirty years experience in the telecommunications industry. For the last seven years he has been CEO of Australia Japan Cable (AJC), an economical and ultra reliable submarine fibre optic network enabling links between Asia or North America and Australia. He holds a Master of Commerce degree from the University of New South Wales.
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On 4th May 1986, the first international fibre optic submarine cable system went into service. UK – Belgium No. 5 was purchased by a consortium of British Telecom International (BTI), Deutsche Bundespost (Germany), PTT Telecommunicatie (Netherlands) and Regie TT (Belgium) from STC Submarine Systems Ltd (UK). At the close of the coaxial analogue system era, STC (now part of Alcatel – Lucent) was the leading supplier of submarine cable systems world wide, commanding 50% of the available market. STC’s standard product, at that time, was its 14MHz system, which offered purchasers a capacity of 1,860 x 3KHz voice channels. UK – Belgium No. 5 was in another league all together, providing a design capacity of 11,520 x 64 kbit/s voice channels. The system connected Broadstairs in the UK to Ostend in Belgium, a route length of 113km. The cable contained six nylon-silgard covered mono mode fibres, operating in pairs to provide three separate transmission systems. Transmission per fibre pair was at a wavelength of 1,310nm and the data rate was 280Mbits/s. To make the crossing, the signal had to be regenerated three times by the means of 3 repeaters power from the terminal stations with a line current of 1.5Amps. The shore ends at Broadstairs and Ostend were installed by the Dutch vessel DG Bast in September 1985. The main lay operations were carried out by the BTI cable ship Alert, free issued to the system
supplier. The cable was loaded at STC’s Southampton factory where the three repeaters were spliced into the cable onboard the ship, and System Assembly and Test (SAT) was completed before the ship sailed. Jointing repeaters and conducting SAT onboard the vessel was standard practice during the analogue era. The North Sea at that time was heavily fished by big trawlers, and, because of the then massive traffic carrying capacity of the cable, it was decided to further protect the cable by burial. Although this is common practice now, prior to UK – Belgium No. 5, coaxial cables deployed in the North Sea were heavily armoured and the cables were surface laid. Operator relied on route diversity to tolerate the inevitable cable breaks. Plough burial in European waters was another first for UK – Belgium No.5. The cable was installed in the spring of 1986, and buried using a plough designed and developed by BTI that achieved and average 0.75m burial depth over 86km of the route. The plough system was similar to those used to today; however, there was one major difference: the cable and repeaters were delivered to the plough via a system of guide tubes suspended from the plough’s tow rope. And the rest, as they say, is history!
Header Images courtesy of www.Atlantic-Cable.com | article images from STC Submarine Systems Ltd brochure