Undersea cables span the globe to send more data than satellites

It was in the mid-1800s that communications pioneers first laid cables on the seabed to create the world’s telegraph — and later telephonic — infrastructure.

Visionary French writer Jules Verne was so enraptured by the idea of undersea telegraph cables that one features in his 1870 novel 20,000 Leagues Under the Sea, when Captain Nemo’s crew find the remains of the world’s first transatlantic cable, laid in 1855, off the shores of Newfoundland.

Now, 146 years after Verne’s book, undersea cables are thriving, according to Alan Mauldin, research director at the Washington DC offices of TeleGeography, an international telecommunications market research company.

Citing data published by the US Federal Communications Commission, he says the technology is the dominant method of international telecommunications, and about 99 per cent of all intercontinental telecoms traffic — data, phone calls, texts, emails — is transmitted via submarine cables.

There is big growth in the sector now because of the fast-rising requirements of cloud-based technology businesses and their customers, as well as the demand for greater capacity from financial services companies seeking the smallest possible delays in transaction times (known as latency).

Mr Mauldin says that demand for global bandwidth is growing at up to 40 per cent year.

There was a time when cables were laid and controlled by large consortiums of national telecommunication carriers, but this is changing. Microsoft and Facebook announced this year they are jointly building Marea (Spanish for “tide”), a 6,600km scheme billed as the “highest-capacity subsea cable to ever cross the Atlantic”.

This cable is faster per second by 16m-20m times than a home internet connection and is due to be completed by October 2017. It will be operated by Telxius, the infrastructure unit of Spain’s Telefónica, and run from Virginia in the US to Bilbao, Spain, and then to network hubs in Europe, Africa, the Middle East and Asia.

The companies have not provided costings for the project.

Meanwhile, Google was part of a $300m consortium that backed the 9,000km Faster cable project linking the US West Coast to Chiba and Mie prefectures in Japan, completed in June. Three months later, Google extended the cable to Taiwan to increase the speed and reliability of its services.

Peter Jamieson, chairman of the European Subsea Cables Association, an industry group, welcomes the investment of large technology companies.

He says many systems are still run by older companies such as BT, AT&T, Telefónica, Vodafone and large communications providers like Level 3, Hibernia Networks and Global Cloud Xchange.

After a long period in which the incumbents have been adding little capacity, established companies are starting to do more, Mr Jamieson says. Vodafone this year went live with a cable from Bengal to Southeast Asia, South Asia and the Middle East.

In September 2015, US-owned Hibernia Networks rolled out Hibernia Express, an “ultra low latency service” aimed at the financial services industry. It boasted of being able to provide the lowest latency between New York and London, and said it was a 5 millisecond improvement compared to existing high-speed networks which now link businesses in the two global financial centres.

Meanwhile, Aqua Comms, based in Dublin, announced in January that its America Europe Connect subsea fibre-optic cable network from County Mayo to Long Island was live.

The company says this too offers reduced latency.

Mr Jamieson adds that Google, Facebook, Amazon and Microsoft are not content with leasing capacity on services managed by others.

“They want to control their own traffic and therefore they are co-financing the new round of submarine cables.”

He rejects the idea that satellite technology is a competitor to undersea cables for carrying digital communications. “Satellites cannot compete with the capacity required, the speed or the latency,” he says.

But investment in the cable industry is not for those seeking a quick return. Backers need patience and deep pockets to undertake the time-consuming process of building new cables, according to Paul McCann, who runs an undersea cable consultancy in Sydney, Australia.

“It is a long-term investment, not a ‘get rich quick’ opportunity,” says Mr McCann.

Mr Mauldin agrees, and says investors who are likely to get frustrated with the process should best avoid it.

“From having the idea, to finding a route, to doing a survey of the marine area, to getting the environmental permits, building the cable and then laying the cable — usually it takes at least two years depending on where you are laying it,” he says.

Additionally, working out when a completed project will actually be delivered is not an exact science, he adds. “Usually people announce one date and then add at least six months to it.”