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A $25 Billion Global Opportunity for Submarine Optical Fiber Cables by 2026

Amid the COVID-19 crisis, the global market for Submarine Optical Fiber Cables estimated at US$18.3 Billion in the year 2022, is projected to reach a revised size of US$25 Billion by 2026, growing at a CAGR of 10.7% over the analysis period. Approximately 99% of international data is transmitted by subsea fiber optical cable networks, which traverse deep terrains to carry and deliver valuable information to various continents and countries. Undersea cable systems are undergoing seemingly endless series of upgrades, and the latest upgrades include addition of 100 Gbps wavelength capabilities. Such upgrades generally help operators keep pace with bandwidth demand. In addition, about 40 submarine cable systems are being built and/or planned in the near future. However, the emergence of new requirements and a set of new players with new builds are not likely to result in overcapacity. The factors that were responsible for investment into submarine capacity over the past several years include an overall rise in bandwidth demand, a desire to meet the requirements of financial services institutions, and the emerging influence of webscale content providers including Google, Microsoft, Amazon, and Facebook. Market growth continues to be driven by upgrades in technology and capacity, especially in the transatlantic route. The submarine communications industry of today is well-informed and innovative, implementing practical and versatile solutions in markets that are increasingly demanding as regards cost-efficiency, connectivity, and reliability. Continued advancements in technology, with capacity and affordability as the major aspects, are expected to play critical roles in the industry`s future growth. The industry is now in the process of putting into operation 100G wavelengths across almost the entire transoceanic route, and this ensures that the future would be one of connectivity based development.

Submarine cables are designed for ultra-high speed real-time transfer of data across continents, countries and cities, and are essential for transmitting data and voice communications across the world, presently carrying about 99% of all voice traffic, and virtually all Internet traffic across continents. Submarine optical fiber cables dominate international voice and data traffic, due largely to the advantages offered in terms of high reliability, security and capacity, cost-effectiveness on major routes. The growing prominence of Cloud and Big Data also necessitates high degree of investments into data centers dispersed across the world. For cloud and big data concepts to be realized, telecom sector requires strong connectivity between these data centers, thus further raising importance of submarine optical fiber cables. Submarine communications industry is well-informed and innovative, implementing practical and versatile solutions in markets that are increasingly demanding as regards cost-efficiency, connectivity, and reliability. Continued advancements in technology, with capacity and affordability as the major aspects, are playing critical roles in the industry`s future growth. The emergence of new applications such as the Internet of Things, 5G, self-driving cars, and machine learning are further enhancing the need for greater bandwidth, which can be enabled by subsea fiber optic cables. Future growth in the market is also emerging from unserved routes and rapid rise in capacity specifically in Pacific Ocean and Africa.

The global submarine cable network is being rebuilt by the new players in the market using the latest technologies and methods. The OTT content providers are installing a new transoceanic network over the existing global submarine cable network. The new network is expected to have unprecedented capacities due to the use of spatial division multiplexing (SDM), which led to an increase in the fiber counts, from 12 pairs to 24 pairs, with more fiber counts re expected in near future. Apart from fiber counts, the overall capacity has also increased from 100 Tbps to 200 Tbps within a few years. Additionally, the modern global network has truly served the global community by connecting almost all relevant places of Earth, which is in contrast to the earlier global network that served only a few large cities. Submarine cables have been recently deployed in the Amazon River Basin, as well as in the remote inhabited small islands in the Atlantic, Indian, and Pacific oceans. Currently, initiatives are ongoing to extend the network to polar regions, with several projects have been proposed in the Antarctic and the Arctic.

The growing demand for high speed Internet due to the increasing internet usage has led to a rapid surge in the demand for higher bandwidth globally. This growing demand for more bandwidth has been one of the major factors driving the growth of submarine fiber cable market. Other factors that add to the market growth include large scale deployment of cables in oil and gas industry, increasing use of smart devices, and growing fiber connectivity in developing regions such as Asia and Africa. These factors have been driving the demand for submarine fiber cables. The growing number of private project developers has led to an increase in the optical cables` length that are being laid. Growing efforts to improve the bandwidth enables several countries to raise their economic growth by developing submarine systems. The demand for higher bandwidth will pave way for new submarine fiber cable projects. The advanced technological improvements have reduced the manufacturing costs and the installation costs have increased. The costs involved in laying cables can be reduced if the cable laying vessels are embedded with advanced technologies that help in laying the cables correctly without errors.

The submarine optical fiber cable systems market has over the years been significantly impacted by the rapid advancements in fiber optical technology, which has led to considerable improvements in system design capacity as well as network efficiency. The rise in capacity has been mainly attributed to the development of Wavelength-Division Multiplexing (WDM), which was first implemented in the SEA-ME-WE 3 system. With this technique, it was possible for cable systems to transmit multiple optical wavelengths through a single fiber pair, thus cutting down the need for fiber and hence reducing overall cost of new systems. Since the 2000s, wavelength capacity has also recorded significant increases, with 100 Gbps wavelength emerging in 2010s from 10 Gbps in 2003. This increase in wavelength capacity thus contributed considerable to the growth of bandwidth available for the world. In addition, significant developments have been witnessed in terms of system upgrades. For instance, during mid-2000s, system owners could swap components in SLTE (Submarine Line Terminal Equipment) for increasing capacity as against building a new cable system. In fact, system upgrades have emerged as a cost effective means to add new capacity in a particular submarine cable system/route in less time compared to deployment of an altogether new system. With optical fiber approaching Shannon Limit, there is increased focus on new technologies for overcoming the ceiling. In this regard, SDM or Spatial Division Multiplexing is one approach that could enable vendors to resolve the issue. The SDM technique makes use of parallel spatial channels for simultaneous transmission of multiple independent optical signals. Furthermore as the system complexity continues to grow, the role of Artificial intelligence management systems is also expected to significantly improve the capability and efficiency of the network.

Asia-Pacific is expected to witness a rise in commissioning and installation of new submarine communication systems as the demand for bandwidth has increased across Asia-Pacific with growing Internet traffic. Moreover, the rising penetration of the Internet in the Middle East and Africa is anticipated to increase underwater communication cable commission and installation in the next few years. North America has retained the largest share in the international submarine communications cable market owing to the higher rate of technological innovations, growing demand for advanced technologies, and increasing focus of countries to strengthen information ties with other nations. Additionally, the replacement of a large section of existing aging submarine communications cable systems is also driving the growth of the market in the region. In Asia-Pacific, the submarine communications cable market is forecast to witness the highest growth in upcoming years due to new submarine communications cable installation projects. For instance, Nexans, an optical fiber and cable firm, has recently announced to supply 250 km of undersea fiber optic cable to establish a connection between Malaysia and Indonesia. These initiatives are expected to provide reliable Internet access to the rapidly growing Internet users in the region.