Acquisition, ownership and operation of Submarine Fiber Pair is the ultimate futureproof solution for scalable transoceanic connectivity, with design capacity of at least 12T/FP and goes up to 20T/FP, and even beyond. Interestingly that’s more than the total capacity of most of the consortium cables that land in India. Till date Submarine Fiber Pair acquisition was feasible only for the elites, the big-4 OTTs and Reliance Jio.
It was only available over the three telco owned submarine cables – TIC, i2i and FALCON, with not more than 2-4T/FP. It’s believed 4 or 5 Submarine Fiber Pair acquisitions have taken place till date. With that as synopsis of current status it's notable that Submarine Fiber Pair to/from India will remain unavailable for the next 2-years, or even a little longer, till the new cable systems are RFS. However, in the inventing period, positioning of Submarine Fiber Pair is set to change significantly and like never before, with interesting interplay of availability and affordability. Submarine Fiber Pair, full and fractional, will gain traction with wider addressable market. It would not be appropriate to abbreviate Submarine Fiber Pair as SFP and hence the term is used as is, respectfully.
Several Independent Infrastructure Providers (IIP) are steadfastly working to develop new submarine cable systems, that are scheduled to land in Mumbai and/or Chennai. Some telco led and OTT supported cable systems, or the other way around, are also in the horizon. While most will have express landing, there is a lone exception planning submarine branch to India. To the market at large, barely the tip of the iceberg is visible with respect to new submarine cable systems, for discussions are confidential and confined to closed groups with decisive meetings during PTC, ITW and SNW. Inquisitive queries often lead to bland and templatized response – we are exploring all options and will announce once we are ready. However, some it seems are making better progress than others, to seize the opportunity that early mover advantage will provide and are likely to go for CIF announcement in Q1 2020 and forecast RFS for Q4 2021, though it’s more likely to materialize in the course of 2022.
Most of these submarine cables would be 12FP or rather 16FP. Hence the primary or the only business model is to sell Submarine Fiber Pair. The target customers are big-4 OTTs, big-4 telco’s and going forward big-4 Tier2 OTTs. Commercial proposals for Submarine Fiber Pair are already being socialized. That leads to a fundamental question - are these target customers ready to sign on the dotted line for Submarine Fiber Pair acquisition! This article is a fact-finding trip to uncover the state of readiness for Submarine Fiber Pair acquisition, design considerations, challenges and solutions to address them.
Subsea connectivity over the last 3-years has moved from CLS-to-CLS to DC-to-DC. At the same time CLS hosted in DC has gained traction where the submarine cable lands directly in the DC, with Equinix leading the way globally. This leads to two Submarine Fiber Pair connectivity models
- <DC>-<CLS>-<Submarine Cable>-<CLS>-<DC>: Here the CLS and DC are at different locations. End-to-end Submarine Fiber Pair delivery will require dark fiber backhaul connectivity between the CLS and DC location. With per-fiber-pair ownership model gaining traction the CLS, with PFE hosted, would be the hub for FP breakout, with spokes of multi-provider dark fiber backhaul connectivity to key DCs.
- <DC/CLS>-<Submarine Cable>-<CLS/DC>: Here the submarine cable directly lands in a DC with PFE and SLTE. In this case the DC is the hub of FP breakout. The DC could be owned by the licensed provider acquiring Submarine Fiber Pair or the DC could be a leased facility. The Submarine Fiber Pair owner with SLTE hosted in the DC does not require dark fiber backhaul connectivity and that’s a key advantage. However, SLTE hosted in other DC's will require dark fiber backhaul connectivity.
Direct landing of the submarine cable in a carrier neutral DC like Equinix or DRT is more likely scenario at the far end overseas location. It has not gained traction in India yet though active discussions are underway for new DC builds in pipeline. SMW6 landing has possibly made a headway with Nextra/Airtel in this respect. Further apprehensions still linger to lay the submarine cable with HVDC over terrestrial backhaul routes. While 5-7 kms terrestrial backhaul has more than one precedence, longer backhaul routes does evoke reliability concerns. Hence the more likely end-to-end construct for Submarine Fiber Pair solution would be <DC/CLS>-<Submarine Cable>-<CLS/PFE>-<DF BH>-<DC/SLTE>.
Today every DC in Mumbai and Chennai aspires for one or more submarine cable to land in its premise. It would be a crown jewel for differentiated credentials. However, not many DC locations are sufficiently close to seashore to invite submarine cable landing, primarily because land parcels near seashore are very expensive. Hence reliable dark fiber backhaul connectivity from CLS-to-DC is set to become as important as the submarine cable, for the weakest link in the chain determines the reliability of the Submarine Fiber Pair solution.
The perception about reliability remains an eclectic mix of fact and fiction, a storytelling of telco legacy over last two decades. However, need for reliability that is worthy of a transmission link will carry somewhere between 12T and 20T of traffic over a span of 20-years, does merit deeper assessment. For this reason, Submarine Fiber Pair solution designers look for diverse route dark fiber backhaul connectivity from CLS-to-DC a preferred option. This calls for Optical Line Protection (OLP) to be implemented for automated path switching in the event of degrade or disruption of one backhaul link. It is important to note that the OLP design must be in sync with optical power budget of the Submarine Fiber Pair between the SLTEs. Hence the IIP along with wet segment vendor must work with the dark fiber backhaul connectivity and OLP solution provider for end-end performance of the Submarine Fiber Pair over the <SLTE>-<Submarine Cable>-<SLTE> connectivity or more precisely the Indian segment of <CLS/PFE>-<OLP/DF BH/OLP>-<DC/SLTE> connectivity.
Dark fiber backhaul connectivity and OLP solution leads to an important question - who is accountable to design, procure, deploy and manage the terrestrial backhaul connectivity, in a manner that <SLTE>-<Submarine Cable>-<SLTE> optical performance for the Submarine Fiber Pair remains within acceptable levels! The IIP offering Submarine Fiber Pair solution is likely the party to have one stop shop responsible for this. However, the IIP does not own and operate dark fiber connectivity and OLP solution in India. Thus, the IIP needs to join hands with a trusted carrier neutral provider partner(s).
It would be insightful to characterize the IIPs a little further to understand their roles and responsibilities with respect to offering Submarine Fiber pair solution. In India IIPs can be classified in two categories, one that intends to establish local operating entity and go through the rigor to acquire ILD and NLD license. The other, are IIPs that are not interested, at least for now, to acquire license and instead forge partnership with one of the licensed providers in India and designate the licensed provider as the landing party. Having licensed operating entity in India has its advantages with respect to owning and operating the Wet Segment in Indian territorial waters, owning the cable landing infrastructure and dark fiber backhaul connectivity. As the same time setting up and operating a licensed entity, maintaining team and complying to other prerequisites has considerable overheads. It becomes more challenging to justify if India in one of the several countries that the cable lands.
An IIP with licensed operating entity in India has two options – develop CLS ground up or lease CLS infrastructure. For a considerable period, there hasn’t been a new CLS setup. The last was for AAE-1, that Reliance Jio built in Mumbai in 2016, though beleaguered BSNL has reportedly constructed a CLS in Chennai in 2018 for the Chennai-Andaman cable system. The point is, constructing a CLS ground up is considerably challenging. Hence the preferred approach is gyrating towards long-term lease of open access CLS infrastructure. This again leads to a question – will the telco’s be willing to open up their CLS to land new open cable systems that will bring Kodak Moment for the consortium built submarine cables that land with them. That’s a topic of feisty argument and interesting panel discussion in SNW.
It must be noted that not having a licensed entity in India is not really a disadvantage to land new submarine cable or sell Submarine Fiber Pairs. It’s just that a different approach needs to be followed to comply with laws of the land. A partnership with a licensed provider as the landing party can provide the necessary regulatory cover and compliance. It will also facilitate buy and sell of Submarine Fiber Pair. The GBI/MENA landing with Sify in Mumbai is a credible precedence of this approach, but of course it does not offer Submarine Fiber Pair.
Having characterised the IIPs, it would be worth the effort to characterise the customers that are interested in Submarine Fiber Pair acquisition, full or fractional, by investing somewhere between $5M and $50M. They can also classified in two categories just like IIPs themselves, ones that have operating license i.e. the telco’s, and the others that are not licensed to acquire, own and operate Submarine Fiber Pair.
The second category of target customers need license cover to pursue Submarine Fiber Pair acquisition within the regulatory framework. This leads to interesting combination, with buyer and seller of Submarine Fiber Pair not having license in India. Here the buyer-seller engagement can be enabled for regulatory compliance by a licensed operator and that will be a unique use case for Submarine Fiber Pair acquisition that hasn't had precedence till date.
A key consideration for Submarine Fiber Pair operation in India is LIM setup for legal intercept. It’s been a topic of discussion and debate for long, on how it should be dimensioned. Legal intercept is hardware and software setup for wire speed packet/frame capture or DPI based on filtering criteria specified. Access to operate the LIM setup is retained by government agencies and enabled when legal intercept based on laid down procedures and confidentiality protocols needs to be carried out. LIM setup is very expensive platform where the commercials depend on number of wavelengths to be monitored concurrently and capacity of wavelength. That gives rise to the question – how many wavelengths in every fiber pair need to be monitored concurrently for a Submarine Fiber Pair. Can the same LIM setup be used for Submarine Fiber Pairs in more than one submarine cable system, as buyers will make multiple Submarine Fiber Pair acquisitions to build route diversity! Every licensed operator makes its own decision with respect to LIM setup and that remains strictly confidential. Similar considerations are expected to prevail with telco partnership facilitated Submarine Fiber Pair acquisition by buyers not having license. At the same time the telco ought to make judicious risk assessment as it puts its neck on the block for the buyer and will be held responsible for its actions and inactions. Whatever the said and unsaid trade-offs with LIM setup are, that have served the purpose and withstood the test of time, will pave the way for revised arrangements for Submarine Fiber Pair buyers.
Revised approach to LIM setup with Submarine Fiber Pair acquisition and per-fiber-pair ownership model will gain traction as Submarine Fiber Pair owners will be individually responsible for LIM setup. In that case is the IIP or the partnered telco as the licensed landing party required to deploy a parallel LIM setup, in order to fulfill its regulatory obligations. In other words, will the Submarine Fiber Pair be subjected to two LIM setups. That’s an interesting question and yet another topic of feisty argument.
Only one Submarine Fiber Pair acquisition is not a subsea connectivity solution to/from India. Multi terabit network designs are around protection schemes that are more resilient than traditional telco backbone connectivity designs with dual path protection. Three diverse paths are considered a minimum requirement. Some even keep a four-path design ready in case it's required. Interestingly, with Chennai-Singapore and Mumbai-Marseilles as the key routes, does the OTTs and others eventually need SIX (6) Submarine Fiber Pairs! That certainly is encouraging demand forecast.
Having said all this, what’s the outlook on economics of Submarine Fiber Pair acquisition. First its route specific and of course related to route length, though it may not be necessarily linear. That means Mumbai-Marseilles Submarine Fiber Pair would be 3X-4X of Chennai-Singapore. Further with Mumbai-Marseilles, an alternate terrestrial route that avoids Egypt crossing would command premium. However, if the terrestrial route spans multiple countries with sensitive geopolitical relationship, it would be a point of concern. The Submarine Fiber Pair economics is also a function of time. If the IIP is dependent on anchor tenant(s) signoff in order to get funding to reach CIF, the buyer is likely to have an upper hand, or so will it prefer to believe. If the cable system is past CIF and headed for RFS there will be balanced negotiations. In the post-RFS phase with more than one option for Submarine Fiber Pair available it would get very interesting, because if there are three (3) diverse submarine cables and the buyer is looking for three (3) Submarine Fiber Pairs, then each cable system developer will know its is indispensable and will demand a fair price. Payment terms with staggered payment option will also influence economics of Submarine Fiber Pair acquisition.
The rise of Submarine Fiber Pair acquisition for sure will create a new era of global connectivity to/from India. It will fundamentally alter how subsea connectivity is viewed, establish new telco-brokered buy-sell equations, lead to open cable landing with carrier neutral infrastructure play, challenge telco dominance of subsea connectivity and lead to great telco-IIP and telco-OTT partnerships, that are built to last.
It’s time to conclude the fact-finding mission for Submarine Fiber Pair acquisition for new submarine cables in making that scheduled to land in India. Undoubtedly, it’s heavy lift collaborative network acquisition to be steered through deep dive discussions, iterative proposals, rigorous negotiations, judicious contracting, closely project managed delivery, meticulous testing and satisfactory handover leading to operational readiness. All this will happen over a span of 12 and even 24 months. So, how do we answer the question - Are you ready for Submarine Fiber Pair acquisition, to/from India! There is active buyer community is interested in Submarine Fiber Pair acquisition. The long-term value proposition is well understood. The capex hopefully would be manageable and business case justified in comparison to opex for wavelength acquisition over 10-years. With this optimism, several discussions are reportedly underway. At-cost and even cost-minus counter proposals are likely to come up going forward. To conclude, those planning to go for Submarine Fiber Pair acquisition are expected to sign on the dotted line only at the Right Time and at Right Price. What’s “right” is what makes Submarine Fiber Pair acquisition really interesting.
It would be worthwhile to revisit the dynamics of Submarine Fiber Pair acquisition after a year. In this period hopefully Equinix and DRT would have made India debut and influence the dynamics submarine cable landing and Submarine Fiber Pair acquisition. Everyone who is fascinated by and in love with the world of submarine cables is cordially welcome to comment and share views and opinion.