Source: IOX

Seaborn is the developer-owner-operator of: Seabras-1, the most direct subsea system between New York - São Paulo; ARBR, the only new direct subsea system planned to be built between Brazil - Argentina (RFS Q4 2018); and SABR, a new subsea system between Cape Town, South Africa and Seabras-1 (RFS 2019).

IOX is the developer of the IOX Cable System ("IOX System"), the first next-generation subsea network interconnecting South Africa, Mauritius and India (RFS 2019). IOX have commenced work for the cable route survey, and once completed will provide a direct route between South Africa and India via Mauritius. Seaborn's SABR and the IOX System will interconnect in South Africa.

The Seabras-1 + SABR + IOX System route will be available exclusively through Seaborn and IOX. Customers can contract through either Seaborn or IOX to receive the full benefits of this alliance.
"We are extremely pleased to work with IOX to provide this unique and highly secure route," said Larry Schwartz, Chairman & CEO of Seaborn. "This alliance will reshape the global communications landscape for the Southern Hemisphere."

Arunachalam Kandasamy, founder and CEO of IOX, said "This new relationship between Seaborn and IOX pioneers new global route alternatives to interconnect key emerging markets with the U.S. This strategic relationship is a step forward for us to give our customers and partners the best routes and services and also contribute to the emerging digital economies.".

Source: Seaborn-IOX Joint Press Release

ANALYSIS: The idea of connecting the Americas to Asia via South Africa, instead of going via the Mediterranean and Egypt, has been around the market for at least the last five years but few gave the idea any credence. This initiative by Seaborn and IOX is bold and could succeed although there are a significant number of challenges.

It is not clear where start-up IOX is getting its funding from. Mauritius Telecom is an anchor tenant but it is doubtful that MT would be able to provide the funding for a 9,000km marine survey. Seaborn’s Seabras-1 cable was financed chiefly by pre-sales to content providers and a US$110 investment by Partners Group. It is possible that Larry Schwartz, CEO of Seaborn, whose strength lies in finance, has lined up the same kind of financing for SABR and IOX.

Interconnections may also be an unresolved issue. Seabras-1 passes Fortaleza, Brazil, the termination point for SABR, but it does not currently land there. Seabras lands in Sao Paulo, Brazil. However, Seabras has a stubbed BU (branching unit) facing Fortaleza. There would be a financial decision to be made whether to activate that BU or arrange backhaul between Sao Paulo and Fortaleza.

In South Africa, SABR is planned to land in Cape Town on the Atlantic coast of South Africa while IOX lands at East London on the Indian Ocean coast. A terrestrial link across South Africa would have to be sourced and could be quite expensive.

Finally, it is debatable whether India has been correctly identified as the market driver for this proposed system of systems. There is a strong argument that the bulk of US-Europe-Asia traffic is originating further East and hubbing in Singapore. This was clearly the rationale behind the original SAFE cable which connects South Africa to Penang, Malaysia with a branch to India. SAFE is fifteen years old and may no
longer be upgradeable. A replacement system will be required.

​It is also interesting to note that Brazil, South Africa, and India are members of the BRICS economic grouping. An initiative to build a global BRICS cable has died on the vine but the kind of commercial initiative by Seabras and IOX focused on a project with a realistic scale has been shown in the past to be able to succeed where grand plans have failed.

Infinera Corp. has announced a restructuring initiative that will see layoffs, product and program "rationalization," and the close of an R&D facility. The announcement came as the company reported its third quarter 2017 numbers that showed both GAAP and non-GAAP net losses.

"In recent years we have made significant investments to become a multi-market company, deliver a fully refreshed product portfolio, and establish a faster technology cadence. Reflecting on the internal expansion associated with these investments, we have identified areas where we can be more efficient going forward," said Tom Fallon, Infinera's CEO, via a press release. "While difficult, my expectation is taking action at this time will result in a more cost-efficient structure that enables us to focus on our strengths and return to profitability as we grow. I believe these are the right steps for our shareholders, our company, and our customers."

In an analyst call with financial analysts November 8, Fallon said that revenue pressure driven in part by customer consolidation, particularly CenturyLink's acquisition of Level 3 Communications, as well as overall price declines and fears that capex could shrink in 2018 presented near-term challenges the company must address. The slippage of completion of the company's XT-3600 platform, a 1.2-Tbps line card for the DTN-X, and the last of its Infinite Capacity Engine 4 (ICE4) products to the first quarter of next year also is expected to affect Infinera's business, Fallon added. He implied as well that Microsoft's adoption of the ColorZ pluggable module was impeding sales to that customer (without mentioning Microsoft by name).

Brad Feller, Infinera's CFO, told attendees on the call that management plans to trim its workforce by approximately 10% and reduce its use of contractors. The company also will close its Beijing design center. The majority of the restructuring should take place in the fourth quarter of this year. The company estimates restructuring costs will range from $21.0 million to $27.0 million, but create annual savings of $40 million.

The restructuring will include title changes for David Welch, who will now become chief strategy and technology officer with responsibility for creating differentiated products as well as an increase in customer interface, as well as for David Heard, who is now an officer of the company and will be responsible for product realization.

Fallon predicted the restructuring will return Infinera to profitability and cash generation during its fiscal year 2018. This compares to a GAAP net loss for the quarter ended September 30, 2017, of -$37.2 million (-$0.25 per share) on revenues of $192.6 million.

The 2Q18 numbers marked a sequential improvement over the -$42.8 million (-$0.29 per share) GAAP net loss suffered in the second quarter of 2017, but were worse than the GAAP net loss of -$11.2 million (-$0.08 per share) experienced in the third quarter of 2016.

GAAP gross margin for 3Q17 was 35.2%, down from 36.7% in the second quarter of 2017 and 45.6% in the third quarter of 2016.

Non-GAAP net loss for the just concluded quarter came in at -$17.0 million (-$0.11 per share), an improvement over a net loss of -$22.8 million (-$0.15 per share) in the previous quarter, yet well off the net income of $7.4 million ($0.05 per diluted share) in the year-ago quarter.

Looking ahead, Feller predicted revenues for the fourth quarter of 2017 will range between $185 million and $195 million; the midpoint of this range would be down sequentially but up 5% year-over-year. He also pegged non-GAAP gross margin at 38%, plus or minus 200 basis points. The midpoint of the guidance would equate to a non-GAAP operating loss of 10% and non-GAAP earnings per share (EPS) of -$0.14, Feller said. He predicted GAAP EPS would come in $0.29 below that figure.

Source: Lightwave

ANALYSIS: According to the Management Overview of Infinera’s financial results for 3Q17, the company has in recent years broadened its addressable market with products designed to address data center interconnect (“DCI”) and metro. However, long-haul and subsea segments continue to contribute the largest proportion of Infinera’s revenue. In the past twelve months, Infinera has performed a major upgrade for Telefonica to the legacy system, SAm-1, a subsea ring around South America and has seen its new XTS-3300 Meshponders deployed on Seaborn Networks’ Seabras-1 (USA-Brazil) system.

Apart from the increased R&D cost associated with developing these new products, it appears that Infinera have been caught out by the speed with which customers’ requirements are changing and delays in bringing new products to market.

Another significant factor is that between 25% and 30% of Infinera’s revenue each quarter comes from just two customers. The CenturyLink takeover of Level3 led to a slow down in procurement of Infinera equipment and services which clearly hurt the top line and the bottom line.

Looking forward to 2018, Management also expects “gross margins to remain suppressed for the remainder of 2017 and into 2018 as we bring our next-generation ICE-based products to market and experience initially low manufacturing PIC yields that improve as we ramp product yields and production volumes.”

​Under these circumstances, it is a prudent move to initiate a cost-cutting strategy. However, Management is determined to stick to its long-term strategy of broadening its addressable market despite the fact that this has so far had only a negative impact on earnings per share. This being the case, the scope for cost-cutting and “right-sizing” will be limited. However, in Infinera’s traditional subsea market, installation of new systems continues unabated. With the trend towards “open systems”, there should be plenty of opportunities for Infinera if they can keep up with the technology curve.

Delivering his speech after the announcement of his victory as the new Prime Minister following a secret ballot vote election in parliament yesterday, Mr. Rick Hou said he will continue to push for the submarine cable project under a new deal offered by Australia.

The new arrangement which was initially announced by former Prime Minister Manasseh Sogavare will see a new company take over from Huawei to pull the submarine cable from Sydney to Honiara.
The new arrangement is said to be just a quarter of the price offered by Chinese company Huawei as all upfront costs are to be taken up by Australia.

The Undersea Cable project was identified as one of the reasons behind the downfall of the Sogavare-led Democratic Coalition for Change Government (DCC), since the new deal with Australia did not go down well with some former members of the cabinet.

The project was one of the major undertakings of the DCC but has been delayed due to some external factors, particularly the involvement of Australia and Huawei.

However, the fall of the DCCG has cast doubts on the fate of the project but the newly elected Prime Minister Hou assured in his speech outside of parliament that he will remain committed to the new arrangement with Australia in pursuing the project.

The Government initially signed an agreement with Huawei to carry out the cable project from Sydney to Honiara but it was rejected by Australia for security reasons. This forced the former Prime Minister Sogavare to consider other options, even pulling the cable from Indonesia.

Mr Sogavare told parliament during the Motion of No Confidence against him that the new investors have already sent in their letter.

The cable was to be pulled from Sydney to Honiara before Australia intervened to halt the project because it would be carried out by Huawei.

Around the same time, Australian media reports emerged about alleged bribery involved in the Sogavare government agreeing to give Huawei the contract.

Huawei said the allegations had no basis in fact, and that it had never given, implied, nor promised any political donations in relation to the project.

Mr Sogavare had stated when touching on the project in his response to the motion of no-confidence in Parliament that, “We are a family of nations in the region. We respect the sovereignty and security concern of our neighbors. We don’t do things that will affect their security”.

Australia's minister for International Development and the Pacific, Concetta Fierravanti-Wells, has welcomed the announcement by Solomon Islands' new prime minister and spoke with journalist Koroi Hawkins of Radio New Zealand about the new cable project which will also connect Papua New Guinea:

CONCETTA FIERRAVANTI-WELLS: We have been in discussions with the Solomon Island government over the past few months. We do welcome the new government's support for this project as has been expressed by the incoming prime minister and we can now continue to work with the Solomon Islands in our planning. And can I just say Australia and Papua New Guinea are working with the Solomon Islands to lay this cable at the same time.

KOROI HAWKINS: Now between Solomon Islands and Papua New Guinea you will be footing quite a big bill. Where is that funding going to come from and is it money well spent?

CF-W: Well we of course, Australia, will provide the majority funding for this cable and we will also as a first step be using about 25 million dollars (US$20M) of our overseas development assistance to fund the initial consultation work with PNG and an experienced Australian telecommunications company which has experience in the management of undersea cable projects. So, we have been working with PNG and looking at a number of and a range of options and funding models in this area for a number of years. And PNG of course does have an existing underwater cable connection to Australia but it has become clear in recent years that this cable has reached its end of life use and therefore requires upgrading and therefore we believe that this investment will not only reduce the amount of debt that will be required by both the Papua New Guinea and the Solomon Islands government but it will also provide faster cheaper and more reliable telecommunications needs as well as respecting the sovereignty of both countries.

KH: Just going a bit wider with the wider geo-politics of the region with the current US administration's Indo-Pacific Region focus is any of the funding for some of this or is any of the strategic influence for this position, taking into consideration that the Australian government probably wasn't as involved in the previous moves by especially Solomon Islands for an undersea cable, is any of this coming from the United States?

CF-W: Look we have a very important objective in our region. Australia has indicated that it will be stepping up its engagement in the region and as part of that step engagement we have we are working regionally and bilaterally with different countries as to how we can better integrate into the Pacific Islands economically, security wise and strategically. After the defense of Australia, the stability security and prosperity of our region is vitally important and so it is in, very much in Australia's interest to have a well-connected both Papua New Guinea and a well-connected Solomon Islands with more development friendly IT infrastructure which in turn will have a much stronger and more positive impact on the long term economic trajectory of both countries.

KH: Do we have a timeline on the current projects any figures on the costs and maybe contractor announcements?

CF-W: Well I think at this stage the first step will be to use overseas development assistance funding to work in consultation with the countries and to work with both countries in relation to this issue. Now we have entered into discussions with a significant Australian telecommunications company which is experienced in the management of undersea cable projects. For reasons of obviously commercial confidentiality we are unable to name the company at this stage but we hope to do so in the future when we have proceeded and had further discussions with Papua New Guinea and with the Solomons but of course the selector, provider and any work that is undertaken will be undertaken in accordance with our own procurement rules.

KH: Just what you said about working with PNG to help Solomon Islands. Is it the case that this cable project is going to go Australia, PNG, Solomons as opposed to Solomons Sydney?

CF-W: Well I think at this point in time that’s some of the technical things that are being looked at. We have been discussing a range of options and funding models in relation to this for some time but we see that there are significant efficiencies from implementing both cables at the same time and therefore what I said earlier reduce the costs that would have been involved in two separate parallel projects as both countries had been contemplating previously. So we see this project as representing the best opportunity to not only deliver an international telecommunications standard to both the countries but also provide both economic and development benefits for both countries as well.

Adapted from: Solomon Star News & Radio New Zealand

ANALYSIS: The long-running saga of bringing the first fibre optic connection to the Solomon Islands continues. Domestic political wrangling initially dogged this project and has now become a regional political issue.

US$20M of Australian overseas development funding, however, will not be sufficient to build a 4,000km submarine fibre optic cable from Sydney, Australia to Port Moresby, Papua New Guinea, and on to Honiara, Solomon Islands. The amount of this funding would cover a desk top study but may not even be sufficient for a marine survey.

It is worrying that the Solomon Islands politicians are assuming that the Australian government has offered to pay the entire cost which would be in the region of US$120M. When reality hits them, this project is likely to be put on hold again.

Furthermore, co-ordinating between the governments of the Solomon Islands and Papua New Guinea has proven difficult in the past because of regional rivalries and domestic vested interests. The Australian Government may find that, although there are clear cost savings from building one cable to serve both locations, in practice it may be easier to implement a two-cable solution.

​In the meantime, the people of the Solomon Islands are not able to reap the economic benefits that a submarine fibre optic connection has been proven to bring to lesser developed nations.

NTT Communications Corporation (NTT Com), the ICT solutions and international communications business within the NTT Group, announced today that as part of a consortium comprising SoftBank, Facebook, Amazon, PLDT, and PCCW Global, it signed an agreement on October 27 to participate in the construction and maintenance of the JUPITER large-capacity low-latency optical submarine cable between Asia and the United States.

The JUPITER cable system will have a total length of 14,000km connecting the Philippines, Japan, and the U.S, and an initial design capacity of 60Tbit/s. It will use the Daet Cable Landing Station in the Philippines. In Japan, Jupiter will have two landing points: the Shima Landing Station in Mie Prefecture and the Maruyama Landing Station in Chiba Prefecture, as well as a U.S. landing station in Los Angeles, California. NTT Com’s Asia Submarine-cable Express (ASE), Asia Pacific Gateway (APG) and Pacific Crossing-1 (PC-1) cables will connect with JUPITER to provide a redundant three-route structure linking major cities in Asia, Japan, and United States with a secure and reliable international network (see below).

Jupiter & NTT Cable Network Map

Source: NTT Communications

JUPITER will feature a state-of-the-art submersible ROADM (reconfigurable optical add-drop multiplexer) employing WSS (wavelength selective switch) for a gridless and flexible bandwidth configuration. JUPITER is expected to launch in early 2020 with an initial design capacity of 60Tbit/s, which will be expanded later to meet rising data demands and complement existing cable systems.

JUPITER will be a 400Gbit/s wavelength-division multiplex (WDM) transmission system deploying the latest fiber and design technologies as the fastest cable between Japan and the United States. It will be capable of transmitting a six-hour high-definition video (about three movies) in one second.

JUPITER will deploy branching units working with WSS ROADM for fast and flexible remote switching of transmission routes. Transmission routes will be quickly switchable to ensure business continuity, including in the event of a natural disaster or other unexpected problem in coastal areas of Japan.

NTT Com will build the new multilayer-security Minamiboso Landing Station in Minamiboso, Chiba Prefecture which will be an extension from the existing Maruyama Landing Station and serve as NTT Com’s JUPITER termination point. The other cable landing station which JUPITER system terminates are well secured as well. JUPITER will also use the existing Shima Landing Station in Shima, Mie Prefecture (see below). NTT Com will provide connection to other cable systems via the Minamiboso and Shima landing stations to maximize transmission route options to support global business expansion by customers.

Jupiter Japanese Landing Station

Source: NTT Communications

In addition, NTT Com will connect the Minamiboso Landing Station with data centers in Tokyo and the Shima Landing Station with data centers in Osaka, via low-loss optic fiber to enlarge the transmission capacity within Japan. Also, NTT Com will directly maintain and operate its landing stations in Minamiboso, Shima, and Los Angeles to maximize service quality between Japan and the United States.

To meet the growing demands for traffic, including internet, cloud services, and coming 5G wireless communications, NTT Com is steadily expanding its cable capacity in Asia and the Trans-Pacific, including by connecting multiple cable systems to its own data centers and enhancing cable redundancy, to offer highly reliable global network services. At the same time, NTT Com will further support the business-expansion initiatives of customers by merging its data center, cloud and network services.

Source: NTT Communications Press Release

ANALYSIS: On November 11, 2017, Philippines incumbent operator, PLDT, announced that it, too, had joined the Jupiter consortium with an investment of PHP7-billion ($136.7 million). Partners in Jupiter each take a fiber pair for their own use, allowing them to use whichever terminal equipment they wish, to make upgrades whenever they wish, and to manage their own connection independently from the other consortium members.

Pioneer estimates that Jupiter will cost about US$460M to build which puts the PLDT investment at rather more that one sixth. Around the same time as the PLDT announcement, Philippine government agencies, Bases Conversion and Development Authority (BCDA) and the Department of Information and Communications Technology (DICT) announced that they will partner with Facebook to build an express terrestrial fiber connection between the east and west coasts of Luzon in a project called SECURE GovNet.
This would provide redundancy for PLDT’s capacity on the highly unreliable AAG cable system which lands at La Union, Philippines. PLDT’s investment figure quoted above may include a contribution to this project as well.

​It is also worth noting that Facebook is now involved in three transpacific new builds: Jupiter, Pacific Light, and Hong Kong-America. As with NTT’s network design (see above), Facebook is going for a 3-cable transpacific solution to increase redundancy and therefore network reliability.

Chilean teleco CTR, in association with Huawei Marine, has been awarded the contract for the submarine part and one of three terrestrial stretches of the much anticipated Fibra Austral, a fiber optic project to connect the far south of the country.

Fibra Austral Cable Map

Source: Telecomdrive Bureau

Of the US$100M available in subsidies, the company requested 52.691bn pesos (US$85M) to roll out 2,829km of submarine cable.

The project consists of one stretch of submarine cable running from Puerto Montt to Puerto Williams with landings at Caleta Tortel and Punta Arenas and three stretches of terrestrial fiber running 1,000km.

The submarine stretch consists of 60 optical channels (per fiber pair) and the Magallanes stretch, which CTR also won, consists of 40 optical channels (per fiber pair) connecting Puerto Natales and Porvenir.

Two of the terrestrial stretches, Los Lagos and Aysén, were not awarded as offers did not meet technical criteria. Tenders for these two stretches will be launched in the next 60 days and are expected to be awarded before the end of the government of President Michelle Bachelet next March, Rodrigo Ramírez, head of telecoms regulator Subtel, told BNamericas.

Four companies presented bids for the submarine cable project: Telefónica, which bid 53.5bn pesos (US$86M); CTR which bid 52.7bn pesos (US$85M); Austral Telco, an investment consortium put together by Chilean mobile operator WOM, which bid 52.7bn pesos (US$85M); and Canada's VuPoint Systems (Bid kept confidential).

Ramírez said the winner had been chosen due to technical merit, the bid amount and the rates to be offered public institutions like municipalities, hospitals and schools for using the infrastructure, which in this case would be free of charge.

Fibra Austral is part of a strategic plan to stimulate the local economy in remote areas and activities such as telemedicine and education.

The government also expects the high bandwidth to facilitate connectivity for research stations in Antarctica and Chile's space research and satellite industry, and there are plans to eventually launch another tender to connect Chilean Antarctica to Puerto Williams.

Satellites are increasingly being used to monitor irrigation and there is a need to connect terrestrial stations to fiber optic networks with large data capacity. Chile also has powerful telescopes in the north of the country which require huge amounts of bandwidth.

Jorge Flies, governor of Magallanes region, told BNamericas that plans are already underway to build science and technology centers in Antarctica and Puerto Williams to download and relay data from some 600 satellites that are used for scientific research, specifically regarding climate change.

The Swedish Space Corporation (SSC), currently offers hosting services in Santiago and Punta Arenas.
Chile's traffic consumption is expected to reach 11.4 petabytes in 2020 compared to 4.3 petabytes in 2015, boosted largely by demand for video.

Source: BNamericas

ANALYSIS: It is not clear from this article whether Huawei Marine (HMN) partnered exclusively with CTR or whether they were allowed to be included in other bidders’ offers as the turnkey supplier of choice but it is likely that HMN represented the “golden bullet” for winning this tender.

The Government of President Michelle Bachelet has been courting investment from China for some years. Discussions between the two countries have even taken place at a senior ministerial level about the feasibility of building an 18,000-km transpacific submarine fiber optic cable from Santiago, Chile to Hong Kong, PRC. In this environment, it is not surprising that Chinese majority-owned HMN is the appointed turnkey submarine system supplier.

HMN has also recently benefited from the Chinese government’s desire to connect Africa to South America with the “SAIL” cable (Cameroon-Brazil), as part of its “One Belt, One Road” policy. With China Telecom looking set to acquire Brazilian fixed network operator, Oi, a Chile-HK cable would complete the “belt”.

​One other curious aspect of the above article from BNamericas is the projected annual demand in 2020 of 11.4 petabits of data for the entire Chilean market of 18 million people. Ignoring the fact that some of this demand will be satisfied internally, this figure implies a requirement for international capacity of only 361 megabits per second. For a population of this size today, the bandwidth demand is more likely to be in the tens of terabits per second by 2020.​

Ciena, Ericsson, and Telstra have successfully trialed continuous data encryption while maintaining speed and reliability over 21,940 km across multiple cable systems.

​Transpacific Cables Used for ULH Encryption Test

Source: Telecomdrive Bureau
​
The engineering teams demonstrated the ability to encrypt data securely while in transit between Los Angeles and Melbourne at 100 Gbit/s, using Ciena’s ultra-low latency 100 Gigabit wire-speed encryption solution.

​With the digitalization of business processes and data consumption rapidly rising, the need to keep data secure without compromising integrity or significantly increasing latency is essential at both the application and network layers.

Organizations with higher security obligations, such as those in the Finance, Healthcare, Defense, and Government sectors, as well as Data Center Operators, will be particularly interested in this new encryption technology. Testing this functionality is an essential step in the path towards commercialization so Telstra can be sure of service quality prior to deployment.

Darrin Webb, Executive Director of International Operations and Services at Telstra, says: “This demonstration shows that customer services with large bandwidth requirements can be secured and data transported across virtually any distance and over an underlying network that uses multiple vendors. This means we can provide service consistency regardless of the cable system used. Customers will also be able to protect their data not only at the application layer, but also at the network layer without any reduction in quality.

“Enhancing our network leadership in the Asia Pacific region is a priority for us and this innovation continues our commitment to providing customers with a world-class network experience,” says Webb.

Emilio Romeo, Head of Ericsson Australia and New Zealand, says: “A series of advanced demonstrations such as these are necessary before any product is released commercially. In partnership with Telstra and Ciena, Ericsson provides end-to-end systems integration expertise to deliver the secure solution, with our teams continuing to hit faster encryption milestones. In January 2015, we had success at 200 Gbit/s between Melbourne and Sydney, then with 10 Gbit/s speeds over the greater distance from Melbourne to Los Angeles in January this year. Now we have achieved 100 Gbit/s. Ericsson will continue to support
Telstra’s path toward commercialization of this enhanced security capability.”

While encryption solutions exist today to protect data when it is ‘at rest’ (at the start and end points), this trial demonstrates the advanced security that can be delivered while data is ‘in transit’, that is, being transmitted beyond the walls of a data center across extensive networks, without any impact to performance.

Source: Telecomdrive Bureau

ANALYSIS: This is one of the first opportunities that Ciena has had to work with Telstra, a company which has emerged over the last ten years from its incumbency in Australia and a failed infrastructure joint venture with PCCW, to become a major driving force for innovation and change in the Pacific wholesale market.

Telstra’s move to take up this leadership role began with the acquisition of pan-Asian regional operator, PacNet in 2014. Overnight, the Company became one of the largest operators of submarine fiber optic cables in the region.

Telstra then embarked on a strategy of innovation, leveraging the assets it had acquired. Having always had a strong relationship with the main turnkey submarine system suppliers, TE SubCom, ASN, and NEC, Telstra developed a new and deep relationship with start-up supplier of the photonic integrated circuit, Infinera. As a result, Telstra became involved in proving Infinera’s technology in the field, much in the same way as Cable & Wireless has done for Xtera in the Caribbean.

Many upgrades followed to the various submarine assets in Telstra’s portfolio, mainly using Infinera technology. The problem for operators of this kind of infrastructure is, so the accepted wisdom goes, that it is very difficult to add value to a “dumb pipe”. System suppliers have risen to this challenge by developing Remotely Operated Add/Drop Multiplexers (ROADMs) and Wavelength Selective Switching (WSS), along with coherent detection, but cable operators have generally been inactive in this area. Telstra, on the other hand, has recently announced an “Always On” wholesale bandwidth on-demand service, leveraging the highly meshed network that the Company operates in the region.

Now, Telstra has bought into another innovation from Ciena (with Ericsson’s help to integrate the various systems) which moves its proposition from the physical layer to the application layer and makes its traditionally wholesale services attractive to large organizations and enterprises that require a high level of security. The article mentions “Finance, Healthcare, Defense, and Government sectors, as well as Data Center Operators” but content providers with huge customer databases holding highly personal information should also be interested in this innovation.

It was not long ago that companies like Infinera, Ciena, and Xtera were feted for showing the traditional turnkey suppliers in the market that they had to alter their mindset by making their terrestrial terminal technology compatible with submarine line terminal equipment. However, as the “new” upgrade market created by these companies has rapidly matured over the last few years, they have been forced to think outside the box to keep their submarine cable customers interested.

Now, those same companies are established players fighting hard to survive in a highly competitive market. While Xtera filed for Chapter 11 Bankruptcy Protection and Infinera is currently restructuring, the consensus recommendation of analysts interviewed by Zacks Investment research for Ciena is 1.5, where the scale runs from 1 to 5, with 1 recommending Strong Buy and 5 recommending a Strong Sell.

NTT Communications Corporation (NTT Com), the ICT solutions and international communications business within the NTT Group, announced today that as part of a consortium comprising SoftBank, Facebook, Amazon, PLDT, and PCCW Global, it signed an agreement on 27 October to participate in the construction and maintenance of the JUPITER large-capacity low-latency optical submarine cable between Asia and the United States.

​JUPITER & Other NTT Cables Map

​The JUPITER cable system will have a total length of 14,000km connecting Japan, the U.S. and the Philippines, and an initial design capacity of 60 Tbit/s. It will have two landing points in Japan: the Shima Landing Station in Mie Prefecture and the Maruyama Landing Station in Chiba Prefecture; as well as a U.S. landing station in Los Angeles, California, and the Daet Cable Landing Station in the Philippines.

NTT Com’s Asia Submarine-cable Express (ASE), Asia Pacific Gateway (APG) and Pacific Crossing-1 (PC-1) cables will connect with JUPITER to provide a redundant three-route structure linking major cities in Asia, Japan and United States with a secure and reliable international network (see above).

JUPITER will feature a state-of-the-art submersible ROADM (reconfigurable optical add-drop multiplexer) employing WSS (wavelength selective switch) for a gridless and flexible bandwidth configuration. JUPITER is expected to launch in early 2020 with an initial design capacity of 60 Tbit/s, which will be expanded later to meet rising data demands and complement existing cable systems.

JUPITER will be a 400Gbit/s wavelength-division multiplex (WDM) transmission system deploying the latest fiber and design technologies as the fastest cable between Japan and the United States. It will be capable of transmitting a six-hour high-definition video (about three movies) in one second.

JUPITER will deploy branching units working with WSS ROADM for fast and flexible remote switching of transmission routes. Transmission routes will be quickly switchable to ensure business continuity, including in the event of a natural disaster or other unexpected problem in coastal areas of Japan.

NTT New Minamiboso Landing Station Map

NTT Com will build the new multilayer-security Minamiboso Landing Station in Minamiboso, Chiba Prefecture which will be an extension from the existing Maruyama Landing Station and serve as NTT Com’s JUPITER termination point. The other cable landing station which JUPITER system terminates are well secured as well. JUPITER will also use the existing Shima Landing Station in Shima, Mie Prefecture (Image 2). NTT Com will provide connection to other cable systems via the Minamiboso and Shima landing stations to maximize transmission route options to support global business expansion by customers.

In addition, NTT Com will connect the Minamiboso Landing Station with data centers in Tokyo and the Shima Landing Station with data centers in Osaka, via low-loss optic fiber to enlarge the transmission capacity within Japan. Also, NTT Com will directly maintain and operate its landing stations in Minamiboso, Shima and Los Angeles to maximize service quality between Japan and the United States.

To meet the growing demands for traffic, including internet, cloud services and coming 5G wireless communications, NTT Com is steadily expanding its cable capacity in Asia and the Trans-Pacific, including by connecting multiple cable systems to its own data centers and enhancing cable redundancy, to offer highly reliable global network services. At the same time, NTT Com will further support the business-expansion initiatives of customers by merging its data center, cloud and network services.

Operational launch is planned for early 2020.

Adapted from: NEC Press Release

ANALYSIS: As forecast by JRC, the transpacific market continues to support new cable builds on the back of demand growth which is in excess of 50% per year CAGR (see table below). There are three submarine cable projects connecting Asia to the Americas which are currently well-advanced in their development.
The C&MA for “Jupiter” is signed, indicating that the participants are committed to funding the project and a system supplier (NEC) is contracted with a planned RFS in 2020.

While “Jupiter” focuses on major Asian island nations, the “New Cross Pacific” consortium, consisting of Korea Telecom, Chunghwa Telecom, China Telecom, China Mobile, China Unicom, Microsoft, and possibly PLDT, focuses on mainland South East Asia, connecting China, Taiwan, Korea, Japan, and USA. This project has been “contract-in-force” since May 2015 but the Plan of Work was subsequently extended, resulting in a planned RFS in 2018.

Transpacific Cable Projects Currently Under Development

Source: JRC

“Pacific Light Cable Network” (PLCN) is, in theory at least, a “private hybrid consortium” consisting of Chinese newcomer, Pacific Light Data Communication, Google, Facebook, and system supplier, TE SubCom. This cable has a mixed focus on both mainland Asia and key island markets and is planned to be ready for service in 2018. Recent evidence of progress includes Facebook’s announcement that it has secured landing party rights in the Philippines.

While the market focus of each of these three cable systems is slightly different, although with some overlap, there are two clear commonalities. First, each grouping includes at least one “content provider”.
There is a global trend towards the inclusion of a content provider in every ultra-long-haul system. A clear indication that this type of industry participant has become a critical source for funding submarine cable projects, as well as the generator of as much as 50% of the demand. Second, Japan continues to be used as an interconnecting hub for transpacific cables with the Philippines now also favored. Existing transpacific and intra-Asian connectivity puts Japan in a very strong position but the Philippines has been chosen over Indonesia which now has an equally solid claim to be a hub but, despite its attempts to create a more welcoming business environment, is still hampered by its reputation for corruption, bureaucracy, and religious bigotry.

Five other projects on the traditional East-West transpacific route have been proposed but are still on the drawing board.

Given the disastrous maintenance record of “AAG-1”, there is talk that the members of this consortium, which include Telekom Malaysia, PLDT, Telstra, Telin, and Viettel, may decide that it will be cheaper to build
a new cable than continue to pay for repairs to the existing cable.

“China-US-2” has been mooted for some time because the existing “China-US” cable has been full for several years. However, since China-US was built, economic relations between USA and PRC have become more strained, resulting in US “Team Telecom” effectively blocking any attempt to install Chinese cable and equipment on US territory. Equally, the Chinese will not accept the exclusion of Chinese system suppliers and cable manufacturers from such a project.

​“Japan-US-2” has also been rumored for a while but all but one of the named participants in this project are participating in one of the three leading projects described above so it is unlikely to go ahead. The odd-man-out is Japanese carrier, KDDI, but this company is not known for taking the lead in initiating new submarine cable projects.

Global Marine has been contracted to undertake a submarine fibre optic cable recovery in the Southern North Sea, spanning from the 15m water depth contour in France to the 15m water depth contour in the UK.

Ulysses South Cable Recovery Map

Source: Kingfisher

The CS Wave Sentinel departed Portland, UK on the 28th August 2017, at the beginning of the next neap tide window.

The cable was recovered from 51°00.2296’N 1°53.9819’E in France to 51°08.7334’N 1°23.9775’E in the UK.

The operation was due to run approximately until 9th September depending on weather or any other operational conditions, but was actually completed ahead of time on 6th September.

Adapted from: Kingfisher

ANALYSIS: The Ulysses submarine cable system is operated by Verizon, formerly known as MCI Worldcom. The system was built in 1997 and consists of two physically diverse segments, both unrepeatered. It consists of 24 fiber pairs and was originally designed to operate with 2.5 Gbit/s wavelength technology. The Southern cable connects Calais, France to St. Margaret’s Bay, Dover, UK while the Northern cable connects Ijmuiden, Netherlands to Lowestoft, UK. These submarine segments are actually part of a much larger Anglo-European terrestrial fiber network (see below):​

​Ulysses Network Map

Source: www.en.wikipedia.org

The Southern submarine segment of the Ulysses system first suffered a cable cut close to the St. Margaret’s Bay landing in May 2007. Global Marine advised at the time that the cable was loose and drifting from its as laid position but intimated that a repair operation was being planned. However, the repair never took place and it is this segment which has now been recovered. To the best of JRC’s knowledge, the Ulysses North Cable remains operational.
​
Given the numerous submarine cables which now connect mainland Europe to Great Britain, the loss of Ulysses South would not have been significant from an operational point of view. Given the availability of many more alternative paths operating with more modern technology and a lower cost base, the consortium members probably decided that their investment in the cable was already a sunk cost and did not merit the cost of repair.

Vard Holdings Limited has secured a contract for the design of a cable lay vessel for Kokusai Cable Ship Co Ltd in Japan.

Vard 9 01 Cable Ship

Source: Vard Holdings Limited

The contract for the vessel was awarded to Vard by Colombo Dockyard, who will build the vessel.
The Vard 9 01 is designed for efficient installation and repair of subsea telecom cables. It is also prepared for the expanding power cable installation market by incorporating a high capacity below-deck cable carousel.

Built in full accordance with Class NK and Japanese flag regulations as well as all relevant international safety and environmental standards, the vessel will have diesel-electric propulsion, class 2 dynamic positioning and large cable tanks, combined with a 2,000-tonnes capacity carousel. The total cable carrying capacity is 5,000 tonnes. The outfitting also comprises a dual cable lay system, A-frame, plough, and trenching remotely operated vehicle.

The keel laying ceremony for the vessel was held in Colombo on September 7, 2017. It will be delivered in 2019.

Source: http://www.amemaritime.com

ANALYSIS: Vard were successful in winning the contract awarded in 2012 by Orange Marine for the “Pierre de Fermat” cable ship which was delivered in 2014.

CS “Pierre de Fermat”

Although the designs appear similar, the new 19-series vessel can carry twenty percent more cable, perhaps in anticipation of more transpacific systems to be built in future.
This is the second new cable ship to be commissioned by a Japanese operator in the last three years. NTT World Engineering Marine (NTTWEM) launched the CS “Kizuna”, built by Kanrei Shipbuilding in Sanmu, Japan, in November 2016.

In March 2017, Global Marine Systems Ltd. (GMSL) announced the conversion from charter to company-owned vessel of the CS “Recorder” “to support the telecoms installation business growth over the next 5-10 years, with a number of critical projects scheduled during 2018, 2019 and 2020.”

​These additions to the global cable ship fleet are quite striking. The fleet was decimated in the early 2000s by the collapse of the submarine cable installation market. When the market returned, marine contractors were far more flexible in the use of existing resources with the result that the number of vessels deployed for submarine fiber optic cable installation and maintenance has remained stable for the last ten years. Additions to the fleet indicate a higher level of confidence in the market than has been seen for some time.

IOX Cable has today announced that Mauritius Telecom has signed an agreement as an anchor tenant to enhance global internet connectivity on the IOX submarine cable system.

IOX Cable Map

Source: IOX

The IOX Cable system, which will connect Mauritius, La Réunion and Rodrigues Island to South Africa and India, is the third Mauritian submarine cable initiative which will provide much-needed internet bandwidth to Mauritius through an innovative and resilient network design of the submarine cable system.

The system, which will be built by Alcatel Submarine Networks (ASN) of France, will span more than 8,850km and will provide an ultimate design capacity of over 13 Tbit/s per fiber pair. It is scheduled to go live in 2019.

“We are extremely delighted to have Mauritius Telecom on board and it reinforces our commitment to Mauritius to provide enhanced and abundant capacity,” said Arunachalam Kandasamy, CEO of IOX Cable.

“With world-class open access data centers being built in Mauritius, coupled with the rapid deployment of cloud-based services, the IOX Cable System will be a driving force behind these key initiatives by providing better connectivity and putting an emphasis on high availability through diverse network design.”

The IOX Cable system will be the first open access cable system in the region and it offers the opportunity for any licensed operators to benefit from the latest technology and seamless access throughout the life cycle of the cable system.

Combined with IOX Cable's integrated service offerings the system will provide seamless interconnection to existing and future submarine cable system off the east coast of Africa and India, and also provide onward connectivity to the Americas, Europe, the Middle East and the Asia-Pacific region.

IOX Cable also announced that they will be expanding their reach to now include La Réunion as part of its construction of a new state of the art submarine cable system. This initiative is an expansion to the planned IOX cable system to connect South Africa to India and Asia. This connectivity will offer new routes and redundancy between La Reunion, South Africa and India.

Through this expansion IOX will further its regional strategy of promoting regional economic development across the Indian Ocean Islands by offering them with not only open access to abundant capacity but also state of the art products and services. These new products and services will enable operators to leverage the IOX infrastructure, its Internet of Things capabilities and get access to other value-added services such as cloud computing and unified communications.

Commenting on this announcement, Anup Gupta, Chief Sales & Marketing Officer of IOX Cable said: “We are seeing robust demand from network, cloud, and content providers looking to leverage our regional position to access the African and Asian markets through our state of the art submarine cable system. By offering robust connectivity to these regions and providing them with seamless direct connectivity to South Africa and Asia, we will support the needs of key regional operators looking to expand and access these regional economic centers, thus keeping our promise to be the Digital Enabler for the region.”

Sources: Capacity Media, Africa.com

ANALYSIS: Although the nature and extent of Mauritius Telecom’s underwriting of the IOX system is not clear, this announcement clearly is a step forward for IOX in its efforts to develop a private submarine cable system that not only serves the island markets of the east coast of Africa but could potentially be a new conduit for westbound Asian traffic.

Currently, SAFE, a consortium cable built mainly by incumbent telecom operators in 2002, is the only cable connecting South Africa directly to Asia. This is an old cable with limited capacity and an outdated pricing structure. The cable is also rumored to have had several maintenance issues in the recent past.

The vast majority of westbound Asia traffic currently uses submarine cables which cross Egypt from the Red Sea to the Mediterranean Sea. Egypt is notorious for charging exorbitant cross-connect fees to traverse its territory, not to mention political instability and obfuscation, and is one of the main subsea bottlenecks in the world. A state-of-the-art submarine cable offering an alternate path via South Africa would be likely to attract a significant proportion of this traffic, especially if that traffic is bound for North America because the latency disadvantage would be minimal.

IOX has made many announcements about its progress since November 2016 and it is clear that it has the support of regional operators. Indeed, this announcement by Mauritius Telecom probably sounds the death knell of a proposed competing consortium cable called “METTIS” (MElting poT Indianoceanic Submarine System). However, IOX has been silent on landing parties in South Africa and India and its funding plan states “Most of the private equity investment is expected from India due to the recent signature of the Indo - Mauritius Double Taxation Avoidance Agreement (The Treaty).”

The connection to Puducherry, near Chennai, would afford interconnectivity with three major cable systems that cross the Bay of Bengal (BBG, i2i, and TGN-TICSCS) and connect India to the Malaysian peninsula and Singapore.

The connection from Rodrigues to the Indian mainland is therefore critical in transforming IOX from a small regional cable operator competing in limited island markets, with an anchor tenant that has interests in all three cables serving Mauritius, into a major new intercontinental route serving transit traffic between Asia and North America.

With several cables now under development from West and South Africa to the Americas, such as SAIL, SACS, and SAEx, this vision of an alternative to the route via Suez looks more viable. However, the funding for the connection to India will be difficult to achieve and certainly will not come as a result of an obscure piece of Indian tax legislation.