John, thanks for the clarification regarding the map. As for the supply and demand of deep sea spaghetti, concerns about a new glut from within the cable laying sector began surfacing just as quickly as the resurgence in cable laying activity began sprouting anew several years ago. See "Asia-Pacific Submarine Cable Market Moves Into New Phase" by Peter A. Evans in the January 2008 issue of Subtel Forum Magazine, a snippet of which appears below, which due to editorial lag obviously reflected the sentiment in the group that was already brewing in 2007 (if you're stuck for time, jump directly to the last paragraph in bold):
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From: subtelforum.com [Page 17]
Introduction - New boom or new bubble?
The last submarine cable boom (1998-2001) and crash (2002) is, I would suggest, still fresh in our collective memory. Following the collapse of that boom, BuddeComm predicted a new boom starting in 2008 with a ramping up period of 12 to 18 months. All the evidence says that the Asia Pacific submarine cable market has now moved into this new phase. For some time now, the unknown had been the amount of unlit fibre ‘sitting doing nothing.’
Whilst there is certainly still fibre lying idle, market activity indicates a much more complex situation. Demand across the region is not even; some cable routes are coming under considerably more pressure than others. At the same time, in the wake of the chaos in Asia’s submarine networks caused by the December 2006 Taiwan earthquake, there is increased demand for workable network diversity. And, of course, there is the continually rising demand for bandwidth within and into Asia, largely driven by China and India.
Whilst other rapidly growing Asian markets are definitely part of the equation, it is the big two that the operators are trying to satisfy by building bigger and faster pipes for the surging volumes of Internet and telephone traffic produced by multinational corporations doing business with these countries. At the same time, we should not overlook the significance of the traffic generated by regional and local customers.
A survey by Telegeography in Sept 2007 noted that international backbone capacity was growing faster than Internet traffic volumes. The research company reported that average peak international Internet backbone traffic grew 60% between 2006 and 2007, while bandwidth grew 68%. As a result, it noted that peak utilisation declined from 47% in 2006 to 44% in 2007. In other words, despite predictions that video, user-generated content and P2P traffic would overwhelm network backbones, 2006/2007 had seen the available bandwidth outpace trafficvolumes, according to the survey. In reporting on Asia, it noted that intra-Asian Internet traffic grew 55% in 2007, following on from 59% traffic growth in 2006; the growth in traffic on the trans-Pacific route was running at 41% in 2007.
The Telegeography report also noted that, barring an unforeseeable price collapse, the outlook for the international Internet backbone market was better than it has been in years. It stated that in the past the rapid downward spiral of IP transit prices had been the biggest challenge. However, now that IP transit prices in many markets have reached a level of market equilibrium, it suggested that carriers may increasingly seek to differentiate their services on the basis of non-price factors, such as network redundancy, reliability, diversity and quality of service.
With companies like Verizon, Asia Netcom and a Telekom Malaysia-led consortium all moving forward with or planning new trans-Pacific installations, even though there are literally terabits of unlit capacity on existing systems, it is not surprising that there are fresh concerns emerging of a new bubble. Whilst not all of the proposed cables are certain to go ahead, there are at least six such projects in the pipeline; one of these is already being installed. Of course, these cables are aimed at meeting a predicted shortfall in capacity as Asia’s broadband usage increases and at the same time providing the much needed route diversity. However, Asia Netcom CEO Bill Barney has warned that, whilst current stocks may well be exhausted by as early as 2013, should all six proposed cables come to market, competition will consign them all to failure. (Continued on p. 18)
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The complete January 2008 issue of Subtel Forum:
subtelforum.com
NB, guest editorials and other forms of commentary found in other issues of this publication, both before and after January 08, reflect similar concerns, almost as if the industry were planning a strategy on its collective sleeve.
A late edit: See in the same Jan 08 issue on p. 46 a trailer commentary from the publisher entitled "Letter to a Friend" where the author notes in his conclusion:
No, there is nothing else we can do than to expect the next industry collapse!
I am prepared to bet that 2010 will repeat 2000!
Same words will come back to everyone's mouth: Chapter 11, distressed assets, consolidation, merger, acquisition, downsizing....
A cyclic industry!
Nothing new on Earth!
Happy New Year Jean Evos
FAC
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