TRANSPACIFIC REGION

9.2.1 CURRENT SYSTEMS

From 2002 to 2016, only four systems were added to the region. (Figure 82) The industry crash of the early 2000s certainly played a large part in this limited growth, but the fact that there had been no new systems on the Transpacific routes from 2010 to 2016 is largely due to existing systems being able to upgrade their capacity for relatively little cost and push potential competitors out of the market.

As with the Transatlantic market, until very recently the Transpacific has been almost fully saturated, with little room for growth other than route diversity and cutting down on existing latency. Lately, however, new systems are being explored in a similar manner to the Transatlantic with the region seeing at least one new cable every year since 2016, with a similar pause in 2019 and an additional pause in 2021. Demand from Hyperscalers, desire for route diversity and replacement of aging infrastructure are the primary drivers behind these newer Transpacific systems. As a result, several new systems are planned through to 2025.

9.2.2 FUTURE SYSTEMS

No systems were added at all to this region from 2010 to 2016. Since then, the region has experienced steady growth with at least one system added each year for the period 2016 to 2019 and nine systems planned through 2025.

The amount of cable in the region increased by 79 percent during this period of growth - adding over 120,000 kilometers of cable between 2016 and 2020. (Figure 83)

Average system length in the region is just over 15,400 kilometers, owing to the Transpacific region having some of the longest routes in the world. Between the massive systems required to span the region, and the easy availability of cheap capacity upgrades, the historically static nature of the region comes as no surprise. Recently, however, there has been a noticeable uptick in system activity driven by the large increase in bandwidth demand brought about by Hyperscalers and the continued adoption of cloud services.

There are currently nine planned systems set to be ready for service for the period 2022 to 2025 and 44 percent of them have achieved the CIF milestone – down only slightly from last year’s 50 percent. (Figure 84) Nearly all these systems are trying to bring large capacity increases along their respective routes, but many of them

TABLE 7: TRANSPACIFIC SYSTEMS, 2012-PRESENT

are directly competing along the same or similar routes. With the average system length of all planned systems for the Transpacific market at just over 13,850 kilometers shorter route lengths and lower latency are also important factors for new systems.

These new systems provide a bonus of increased route diversity – especially along the southern part of the region. A few of the systems that are not yet CIF are backed by Hyperscalers. This takes them out of direct competition with other planned systems and removes some of the financial risk from having to sign on outside investors. As development in the Transpacific has seen renewed interest brought on by increased bandwidth demand from cloud services, expect this region to see similarly high rates of growth as the Transatlantic.

Table

REGIONAL SNAPSHOT:

Current Systems: 83

Capacity: 1109 Tbps

Planned Systems: 14

Planned Capacity: 1112 Tbps