TRANSATLANTIC REGION

9.1.1 CURRENT SYSTEMS

Growth on the Transatlantic route skyrocketed from the late 1990s through 2003. After a 12-year drought, the Transatlantic region added a new cable every year from 2015 to 2018. After a brief respite in 2019, the Transatlantic region is back to pushing forward with strong momentum. (Figure 79)

Two major causes of the development slowdown were a glut of capacity and the financial crash of the early 2000s which was brought on by overinvestment in the submarine cable industry. With investment on the rise again, and systems aging out in the Transatlantic route, new systems are beginning to come online. The MAREA system installed in 2017 tapped into the exploding demand from Hyperscalers, with one of the key selling points being massive bandwidth available — 200 Tbps potential — on a modern submarine fiber system on a route full of aging cables. Additionally, this cable – along with Dunant cable installed last year — provide an alternative path to increase route diversity, and more directly connect Europe to important data centers in Ashburn, Virginia. The SACS and SAIL cables installed in 2018 potentially indicated an increased desire to South America and Africa directly but this has not seen sustained momentum. Additionally, to further connect South America with other areas of the world, 2021 saw the addition of the EllaLink system that branches across other areas of the continent before traveling north to Europe.

Due to increasing capacity demands along the north Transatlantic between New York and Europe and the desire for new connections to the Mid-Atlantic of the

United States and across the South Atlantic, the Transatlantic route has enjoyed steady growth with two Hyperscaler systems – Grace Hopper and Amitié – entering service this year.

9.1.2 FUTURE SYSTEMS

During the initial boom of Transatlantic system development, the average system length was 12,000 kilometers with most systems taking similar routes between Europe and the US. Overall, this average has gone down significantly with the average length of Transatlantic planned systems now as low as 8,000 kilometers. This has been due to the new Hyperscaler systems that seek to provide more direct routes between their data center facilities rather than worrying about connecting to a major city first.

While there was a notable rise in demand for routes away from the traditional New York-London, the Amitié and Grace Hopper cables created additional connections along this route, highlighting its continued importance. (Figure 80) The change in customer requirements from purely bandwidth to bandwidth and low latency has driven developers to plan routes averaging 18 percent shorter than previous systems from the early 2000s. New systems in the Transatlantic boast significant capacity increases with both systems entering service this year adding a combined 670 Tbps – increasing the existing Transatlantic capacity by nearly 70 percent.

There are currently four planned systems set to be ready for service for the period 2022 to 2025 in the Transatlantic region. Two of these systems follow the traditional route between Europe and the United States, showing that this connection still has great importance despite changing network trends. Another planned system stretches from Virginia Beach, Virginia in the United States all the way to South Africa. The last planned system for the Transatlantic connects Northern Canada to Norway, blazing an entirely new trail.

Three of the four planned Transatlantic systems have achieved the all-important CIF milestone. (Figure 81) This indicates growth in this region continues to remain strong. Considering the amount of data that travels between Europe and North America, this is very unlikely to change moving forward.

The Transpacific market had historically been like that of the Transatlantic, showing little growth year-upon-year. Just like the Transatlantic, however, the Transpacific region has seen a noticeable uptick in activity recently. Hyperscalers and those seeking route diversity have been the primary drivers behind new system growth in this region.

REGIONAL SNAPSHOT:

Current Systems: 15

Capacity: 742 Tbps

Planned Systems: 9

Planned Capacity: 1112 Tbps