the perceived future of the submarine cable industry markets

www.terabitconsulting.com

The Perceived Future of the Submarine Cable Industry:

Markets

Michael Ruddy Managing Director Terabit Consulting


Investment, 1987-2011 New System Market by RFS Date

$54 billion of undersea fiber optic investment to date 2011: $1 billion worth of new systems entered service Market average = $2 billion worth of new systems/year

Source: The Undersea Cable Report 2012


Snapshots of Region-by-Region Deployment New System Market by RFS Date (Three-Year Periods)

1989-1991 1999-2001 2009-2011

1989-1991: Transatlantic + Europe/Med + Transpacific + East Asia account for 7/8 of investment

1999-2001: Greater interest in South America and South Asia (Transatlantic + Europe/Med + Transpacific + East Asia = 2/3 of investment)

2009-2011: Africa + South Asia/ME = of investment (Transatlantic + Europe/Med + Transpacific + East Asia = 1/3 of investment)



International Bandwidth Demand

Highest growth rates will be in developing markets

Highest volume rankings will migrate away from North America and Europe

China, India, and Brazil = Greatest sources of new international bandwidth demand


Drivers of International Bandwidth Demand

Looking beyond the growth of applications Strong economic growth in developing markets,

often organic Chinas GDP (PPP) will likely exceed USAs in 5 yrs. Brazilian growth has been accompanied by

relatively even distribution of income

National broadband plans Most importantly, FTTH and 4G


The End of USA-Centric Bandwidth Demand

2011 2021 2026 2031

Brazil 11% 27% 39% 52%

India 8% 28% 55% 101%

China 14% 48% 103% 208%


Activated International Bandwidth by Country, 2011-2031

Comparison of Each Countrys Activated Intl Bandwidth to USAs Activated Intl. Bandwidth


Snapshots of Market Share Shares of New System Market by RFS Date

1989-1991 1999-2001 2009-2011

Alcatel-Lucent and TE SubCom dominant Japanese competitive landscape has shifted greatly over

the last 20 years Huawei Marines strategy paying dividends Qualified players in upgrade/equipment market



Industry Challenges

Developing an undersea infrastructure that takes into account the end of USAs bandwidth supremacy

Constructing a dynamic, reliable, multi-regional global network capable of meeting every countrys requirements Bringing capacity pricing in the developing world into line

with developed markets Avoiding market shocks (i.e. reorganization and

capacity dumping after dot-com burst) Promoting competition within a fully-competent

supply community


Thank you!

Michael Ruddy Managing Director

Terabit Consulting, Inc. Cambridge Riverview Center

245 1st St., 18th Floor Cambridge, Massachusetts 02142 USA

Tel: +1 617 444 8605 email: [email protected]

The Perceived Future of the Submarine Cable Industry:MarketsInvestment, 1987-2011New System Market by RFS DateSnapshots of Region-by-Region DeploymentNew System Market by RFS Date (Three-Year Periods)International Bandwidth DemandDrivers of International Bandwidth DemandThe End of USA-Centric Bandwidth DemandSnapshots of Market ShareShares of New System Market by RFS DateIndustry ChallengesThank you!

the perceived future of the submarine cable industry markets

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