WTHE HEN The British, Estonian and Finnish navies held a joint exercise in the Baltic Sea earlier this month, with their aim not to hone their military skills. Instead, forces were training to protect underwater gas pipelines and data pipelines from sabotage. These exercises followed the events of October, when submarine cables in the region were damaged. Sauli Niinisto, the Finnish president, questioned whether the Chinese ship accused of the misdeed had dragged its anchor on the ocean floor “intentionally or because of extremely poor seamanship.”
Underwater cables were once considered the boring plumbing of the Internet. Today, data economy giants like Amazon, Google, Meta and Microsoft are demanding more control over the flow of data, even as tensions between China and America risk dividing infrastructure global digital. The result is to transform submarine cables into valuable economic and strategic assets.
Underwater data channels carry nearly 99% of intercontinental Internet traffic. TeleGeography, a research company, estimates that there are 550 active or planned submarine cables that currently stretch more than 1.4 million kilometers. Each cable, which is typically a bundle of 12 to 16 fiber optic wires and as wide as a garden hose, lines the seabed at an average depth of 3,600 meters. Nearly half were added in the last decade. The most recent ones are capable of transferring 250 terabits of data every second, the equivalent of 1.3 million cat videos. The data may be stored in the cloud, but it's traveling under the ocean.
Since 2019, demand for international internet bandwidth has tripled to more than 3,800 terabits per second, TeleGeography estimates. The rise of data-intensive artificial intelligence could reinforce this trend. Synergy Research Group, a data company, predicts that the data center capacity of large cloud computing providers will increase almost threefold over the next six years. To connect these data centers to the Internet, between 2020 and 2025, the data cable industry will install 440,000 km of new underwater lines.
A big change has come from big tech. Until the early 2000s, submarine cables were primarily used to carry voice traffic around the world. Telecom operators like BT and Orange (formerly France Telecom) controlled most of the capacity. In 2010, increasing data traffic led Internet and cloud computing giants – Amazon, Google, Meta and Microsoft – to start leasing capacity on these lines.
As their data needs grew, technology companies began investing in their own networks. In 2012, the four companies used about a tenth of international bandwidth; today, they demand almost three-quarters of it. The deep pockets of big tech guarantee the completion of projects. According to the Submarine Telecoms Forum, an industry body, only about half of all announced cable systems are actually built, unless they are backed by technology companies, in which case they almost always are.
Cables backed by big tech account for nearly a fifth of the $12 billion in planned investments in new systems over the next four years. Amazon and Microsoft have one and four networks, respectively. Meta owns one cable system in its entirety and invests in 14 others. Google is the most aggressive: the search giant directly owns 12 of its 26 cables. This year it completed Firmina, a $360 million project that stretches more than 14,000 km from the east coast of North America through Brazil to Argentina.
Dedicated cables allow tech giants to avoid competing for third-party bandwidth and respond quickly to changes in user demand and any problems (if a cable on a route is damaged, data can be redirected to another company). ' lines). TeleGeography's Alan Mauldin points out that being owner-operated also gives tech giants the luxury of designing itineraries that meet their specific needs. Most telecommunications operators rely on public “landing stations,” which connect offshore cables to customers’ land-based data centers. By owning their cables, companies can plug them more directly into their own data centers, speeding up traffic.
Their bandwidth and speed are further enhanced with smart technology, which makes deployment easier to own. In 2019, Google introduced an innovation (“space division multiplexing”) that increased the number of fiber strands in a cable from 16 to 24. This year, it went further by doubling the number of “cores” ( groups of fiber yarns) in its new model. TPU cable system that connects Taiwan, the Philippines and America, increasing capacity while reducing operating cost per bit.
All of this is transforming the data cable industry. After starting out as large buyers of bandwidth from telecommunications companies, large technology companies are now leasing capacity on some of their cables from telecommunications operators. Traditional telecom companies are happy with this arrangement because they face constant pressure from consumers for more capacity but, unlike big tech, are severely short of capital. As for the specialized companies that supply the equipment and lay the cables, these are good years.
Like many other global industries, the data cable sector is also embroiled in the technological competition between America and China – a second big shift. Take the Pacific Light cable network (PLCN). The 13,000 km data pipeline was announced in 2016, with support from Google and Meta. It aimed to connect the west coast of America to Hong Kong. By 2020, it had reached the Philippines and Taiwan. But last year, the U.S. government refused to approve the final stretch to Hong Kong, fearing it would give Chinese authorities easy access to U.S. data. Hundreds of kilometers of cables that would connect Hong Kong to the network sit unused at the bottom of the oceans.
America is blocking China in another way. Laying cables deep is complicated work. Only a handful of entrepreneurs have the required skills. Three: the Alcatel submarine networks of France, NEC of Japan and SubCom of America – receive more than 80% of the spending on cable construction. HMN Tech, a Chinese challenger from Huawei, the Chinese champion of telecommunications equipment, claims 9% of new annual construction spending. But in a context of Sino-Western tensions, the new cables with links to America, that is to say most of them, avoid HMN Technology as a provider. Telecommunications executives say they are discouraged from using HMN. In 2022, a lucrative contract for SEA–ME–WE 6, a 19,000 km line belonging to a group of telecommunications operators, including the Indian Bharti Airtel and the Singaporean SingTel, and connecting Southeast Asia to Europe, was awarded to SubCom, even if HMN's offer would have been lower.
China responds by charting its own course. PEACE, a 21,500 km submarine cable linking Kenya to France via Pakistan, was built entirely by Chinese companies as part of China's “digital Silk Road”, a project aimed at increasing its global influence. Reuters reported that this year, three Chinese operators – China Telecom, China Unicom and China Mobile Limited – would invest $500 million in a cable network linking China and France via Singapore, Pakistan and Egypt. The project, which will be built by HMN Tech, will compete directly SEA–ME–WE 6.
Despite growing Sino-US rivalry, between 2019 and 2023, bandwidth between the two increased by 20% per year. American and Chinese mobile operators, which also rely on cables, continue to increase network connectivity in their respective territories. However, the necessary licenses are becoming increasingly difficult to obtain.
In March, the US Federal Communications Commission released a proposal that would require licensees to provide more information about their owners. He also acknowledged concerns that the presence in America of China Telecom's physical infrastructure is “highly relevant to national security and law enforcement risks.” All this makes the path taken by bits and bytes more circuitous than before, and therefore more expensive. If trans-Pacific tensions continue to rise, these routes could one day disappear altogether. ■
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