The magic power of 2014 seems a double-dealer on the submarine cable industry. It endowed the industry with an investment peak, secured funding for new cables with significant importance around the globe, across the Pacific, connecting Asia, Africa and Europe, linking Brazil to the US, Africa and Europe. On the other hand, it resulted in a disaster which is even worse than the one caused by the Japan Earthquake and Tsunami in 2011. Here come the top stories of 2014.
1. Missing MH370 and Telecom Executives
Malaysian Airlines Flight MH 370 had disappeared with 227 passengers and 12 crew members on March 8.2014, the day after the signing of SEA-ME-WE 5 agreement in Kuala Lumpur. Ms. Hualian (Happy) Zhang, the VP of Network Planning for China Telecom Global, was among the ill-fated passengers of KL-Beijing flight. For me, it is definitely a disaster worse than the one caused by the Japan Earthquake and Tsunami on March 11, 2011. At this year end and the coming of Chinese new spring festival, we pray and may peace and blessings be upon Happy’s family.
Nonetheless, I think it is a fault of the consortium cable model, with extremely low efficiency, professionals are gathered with long and frequent trips to discuss issues for hours which should be done in a dozen of minutes. The industry should explore innovative approaches for business.
2. Google leads the FASTER consortium
Google teams up China Mobile International, China Telecom Global, TimedoCom (Global Transit 2), KDDI and SingTel to construct the US$300 million FASTER Cable and leads the consortium as the MC Chair. Obviously, FASTER has been labeled as a Google-cable by the media worldwide. It can be expected, the capacity over FASTER is going to be much cheaper than capacity on the other cables with similar route, as the capacity over another Google-cable Unity is substantially cheaper than others trans-pacific. When Google announced its investment in the FASTER cable, it drove the traffic to SubmarineNetworks.com to a history peak. How the internet society is influenced by Google.
3. SEA-ME-WE 5 finally comes to implementation
After almost 8-year’s planning, SEA-ME-WE 5 finally concluded its C&MA on March 7, 2014. Among its landing points in 17 countries, the landing station in Bangladesh and Myanmar seems of more critical for diverse cable routes in these two countries.
4. Telstra announces to acquire Pacnet for US$697million
Telstra announced last week to acquire Pacnet for US$697 million. This is the largest acquisition of Telstra, and the largest acquisition in this year on private cable operator. Upon closing of the acquisition, Telstra will own a Pan-Pacific cable network, including Telstra-Endeavour, EAC-Pacific (Unity), EAC-C2C, etc, being the only one foreign telecom company with IP VPN and data center licenses in China market. The acquisition and merger should be a win-win deal, both companies are exciting on the deal and their prospect.
5. China Unicom makes AAE-1 and is going to land it in Myanmar
In a competition with SEA-ME-WE 5, China Unicom leads a consortium to construct the Asia-Africa-Europe 1 (AAE-1), and takes advance by signing C&MA on Jan 18, early than the SMW5 C&MA signing. Moreover, China Unicom will land the AAE-1 cable in Myanmar and extend it to China seamlessly with the China-Myanmar International (CMI) terrestrial cable. With such an approach, China Unicom will shorten the route from China to Africa, Europe and the Middle East by more than 30 ms.
6. New Cross Pacific to be the cable with largest capacity
As SMW5 and AAE-1 are twined in Asia-Africa-Europe route, New Cross Pacific (NCP) and FASTER are paralleled trans-pacific. While FASTER was announced to build with the largest capacity of 60Tbps, NCP exceeded it with trans-pacific capacity of more than 70Tbps. NCP consortium comprises China Unicom, China Telecom, China Mobile, Chunghwa Telecom, KT and a US-based company. Who is the US-based company, though it is not released, the whole industry may have known it.
7. Brazil becomes the hot land
Brazil, Country of the Future, country of the FIFA 2014 and the Rio Olympics 2016, has become a hot land for submarine cables. Google announced to build the COTA (Cable of The Americas) linking Brazil and the US, Microsoft participated in Seabras-1 for Brazil-US capacity. On the other side, the US$185 million cable connecting Brazil and Spain got the promotion by Brazilian President Dilma Rousseff, and the South Atlantic Cable System (SACS) will connect Brazil and Africa (Angola).
8. Missing insights from Sunil
The entrepreneur and industry veteran Mr.Sunil Tagare joined a US-based ISP Hurricane Electric in August. After his inauguration, the industry lost a minded voice, no matter you like it or not. I know well of Hurricane Electric, a pure ISP company, not just their business but also the way they are doing business. I decided to do IP peering with Hurricane Electric when they are a quite small ISP in around 8 years ago, and have been keeping good contact. With my perspective, Hurricane Electric is one of the best ISPs worldwide. Hurricane Electric is now a global Tier 1 ISP and operates the largest IPv6 network. I doubted the choice of Mike Leber, the owner of Hurricane Electric, to select Sunil as the Head of his Global Business Development. Sunil has been trying to lower the IP transit cost for small-scale ISPs with innovative submarine cable investment, this may be a sense suitable for Hurricane Electric. With my understanding, Sunil and Hurricane Electric don’t match. I was wondering whether Sunil proposed Hurricane Electric to invest in a cable, but I know Mike won’t like such a low efficiency submarine cable business. There are a few in the submarine cable industry with sense of IP, either network or business point of view. While I was thinking Sunil’s joining Hurricane Electric as one of the top stories herein, I suddenly found things have changed. Sunil, welcome back and sound in the submarine cable industry. Your insight seems benefit certain carrier already.
9. Success of Omantel
Omantel follows China Unicom to be the second largest investor of the AAE-1. Surprised? I did. How can Omantel has such a huge requirement on the AAE-1 capacity? They don’t have by themselves. More surprisingly is that Omantel has returned most of their investment in the AAE-1 cable, while many of the other AAE-1 consortium members deny promoting their AAE-1 investment now. Traditionally, it is too early to promote the capacity available two years later. But now, there are innovative players coming.