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Summary:

Transglobal fiber networks that crisscrossed the planet were the most visible and expensive manifestation of the broadband boom (and later the bubble) of 1990s. Thanks to overbuilding, collapsing prices and shady dealings, the boom turned to a bust, and before we knew it, long haul networks […]

Transglobal fiber networks that crisscrossed the planet were the most visible and expensive manifestation of the broadband boom (and later the bubble) of 1990s. Thanks to overbuilding, collapsing prices and shady dealings, the boom turned to a bust, and before we knew it, long haul networks became a four letter word.

360 Networks, Qwest, Global Crossing, Level 3 Communications and MCI were some of the names that got caught in the down draft. Mother of all cons, Enron is gone, and so have many other names. Those dark days might be fresh in our collective memories, but there is a hesitant sun that is rising. A new dawn, perhaps!

The first sign of a new dawn: a new network by Verizon Business (which in reality is the old MCI) and a gaggle of Asian telecom operators including China Telecom, China Netcom, China Unicom, Korea Telecom, and Chunghwa Telecom of Taiwan.

The new cable consortium is going to build a $500 million network called, Trans-Pacific Express, and the 18,000 kilometer cable system will have capacity of up to 1.28 terabits/second, but will eventually upgrade to over 5 terabits per second. The network will land on Nedonna Beach, OR, on the US side and will hit China at Qingdao and Chongming. It will also have landings in Tanshui, Taiwan, and Keoje, South Korea.

The new network should not come as a surprise to anyone who has been following the telecom and broadband markets. The traffic between Asia Pacific (and China in specific) and the U.S. has been increasing at a steady rate, and current infrastructure is feeling a bit stretched. Look at the map to get a visual clue about the lopsided nature of the global fiber infrastructure.

VSNL, an Indian company owned by Tata Group, had snapped up the Tyco Global Network for about $130 million in 2005, and was clearly a bargain compared to the new network build-out. However, there is a good chance VSNL is going to upgrade its networks as well, and not just to meet capacity demands. The new China-U.S. network poses a big challenge to their business.

We have written in the past about how the telecom industry is painfully inching its way back, atoning the sins of Broadbandits. And nothing is better than a new network, as a final act of atonement by the company formerly known as MCI, or Most Corrupt Institution part of Bernie Ebbers’ WorldCon.

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  1. I just got a quick lesson in modern trans-oceanic networks yesterday. Lets look at Flags new middle eastern FALCON Network. It has high capacity, but low current usage. This is a direct quote from FLAG FALCON

    “Self healing Gulf loop, providing maximum design capacity of 1.28 Tbps. Initial launch capacity 50 Gbps.
    Four fibre pair route linking the Gulf to Egypt and India. Design capacity of 2.56 Tbps, with initial launch at 90 Gbps.
    Approx. length 10,300 km.”
    http://www.flagtelecom.com/index.cfm?page=4023

    This seems to be the case on many routes, certainly atlantic routes. So will we see an abundance of fiber capacity on the trans pacific route too? Is the amount of unlit capacity there such that it can easily be activated and an incumbent owner of such fiber could start a price war?

  2. Can you tell me where you found the map featured in the story?

  3. The map above is from TeleGeography Research.

  4. One swallow does not make a summer and one new transpacific cable does not make an industry revival. There are at least four proposals out there for new transpacific cables from different parts of Asia to US. If all of them are built, we could be in for a repeat of the meltdown we saw in 2002-3.

    As for the transatlantic, capacity is gradually getting taken up but the supply-demand balance has some way to go before it approaches equilibrium. And by the way, it never reaches that point because investors are always looking to be first to market so they initiate what is usually about a 2-year process to plan, build, and commission a transoceanic cable well in advance of the curve.

    What the submarine fibre optic industry needs above all else to survive is for broadband to be as readily available as possible to fixed and mobile end users. Technology, geopolitics, and macroeconomics are all playing a part in making broadband ubiquitous but I would estimate that still 75% of the ultra-long haul fibre which is already installed is not yet lit.

  5. Alan:

    I couldn’t find that specific map, what is its name?

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