Deep under the ocean lies a wide reaching entity spanning over a million kilometers, with the power to influence and shape our very own society. This mysterious object is known to attract sharks’ voracious appetite, yet it is not an animal of any kind. It’s not Cthulhu[1], it’s fiber optic submarine cables. And believe it or not, these structures are the foundations of the telecommunication systems that we are so reliant on. But why and who place cables at the bottom of the ocean?

For this month’s article, the teams behind Development Economics and Technology, Health and Environment have challenged each other to bring their own spin on cables running through the ocean’s floor.

From the telegraph to the internet

The concept behind wired communications isn’t properly new. Curiously enough, neither is the idea of running them by the ocean floor to connect regions far part. In fact, the first Transatlantic cable was installed all the way back in the 1850s. This venture – an attempt to shorten communications between the UK and its American allies from a week’s long process to a single day – would take the form of a telegraph line. Composed by just seven innocuous copper wires, it lasted all of three weeks before it broke. Nevertheless, it laid the groundwork for the communication’s architecture of the future.

Fast-forwarding to today there’s a 1.2 million kilometers long fiber-optic submarine cable infrastructure connecting the world together. Whereas the first cables were dingy and incapable of sustaining a slightly higher voltage, these optical fibres are protected by several layers of plastic and metals, shielding them fromthe hazardous threats of the environment (at least non-shark related threats). They weigh over 1.4 tones per kilometer and come to about 10 cm in diameter.

It’s fair to say that a lot of resources go into these cables, and one cannot help but wonder how they are made or even how they monetized.

Picture 1.png

The answer should be intuitive for both: in one, the telecoms footing the bill split the bandwidth – the rate at which data is transferred – between themselves. With this allocated bandwidth, they provide communications services (such as loading up this webpage) to their respective markets.

As for laying the down cables, it is mostly a matter of preparation and work. Firstly, the installers must evaluate the ocean floor path they wish to install the cables on, something done through different scanning methods, which is both arduous and expensive. After choosing the desired path, a special type of cargo ship, such as the one in figure, must be employed to lay the cables underneath the ocean floor, in order to prevent their breakage.

Be it due to the need of each of these companies to operate several of these vessels in order to lay down these cables, or the fact that they are expensive to make on their own, it’s fair to call it a capital-intensive industry. New players are inhibited by the steep entry barriers, even taking into account that these cables have a relatively short lifespan – each should last about 25 years – and don’t seem to keep up with the demand of our increasingly tech-hungry societies. Competition is nevertheless fierce for a relatively limited number of contracts.

But who are these companies: are they privately or publicly owned? Currently, the submarine fibre optic cablesare owned by private companies with a stake in communications. This also includes companies such as Fujitsu, Alcatel, Huawei and so on. However, they often receive funding for these ventures and cooperateclosely with public entities – after all, communications are essential to any functional nation-state, even beyond consumer markets.

But here’s a question that you might have asked yourself already: Why not satellites? Couldn’t this essential service be assured by satellites, whilst also ensuring a wider reach? After all, satellites are all over the place and next-generation connectivity tends to take wireless form; be it my earbuds or even charging my phone.

For starters, there is latency. Fiber optic has lower latency times, meaning that the travel time for the internet signals to their destination and back are shorter. It might not appear to be that relevant – unless you play videogames – but even a difference as small as 20 milliseconds can severely disrupt your internet activity. Second, wired connections have larger bandwidths, which as mentioned before, are the aggregate maximum capacity of an internet connection. This is especially true when taking into account larger scales: whilst our beloved cables operate at a capacity measured in the terabits per second (1012), satellites only provide around the gigabit per second (109) region. From 5G to autonomous cars, the main driver for these technologies are the submarine cables.

Big tech and the scramble for the African market

Locations of the world’s data centers

Locations of the world’s data centers

Underwater sea cables are not only a better solution when compared to satellites, but are also good investments for companies that have to think big. Whereas in the past the main investors were telecoms, the new wave of investors across Europe and America are big tech. But what about Africa, does it apply to that continent as well?  The answer is yes.

Companies like Google and Facebook, among others, have made considerable investments in Africa since it represents a market with highly unexploited potential. Moreover, network traffic in this continent has increased sharply, in addition to demand for the Internet, therefore making it both viable and vital.

Cloud computing is also on the rise. As companies migrate their IT infrastructure to the cloud, big tech companies who already provide the bulk of cloud computing and services start building more data centers. They consume a lot more bandwidth.

Therefore, gaining a stake in fiber optic cable is an opportunity for both vertical and horizontal integration. Google is already providing phone plans across the world. But as with any continent and country, Africa comes with a number of challenges. For starters, it is limited in the number of English speakers as well as levels ofliteracy; the bulk of the internet is made up of English-language websites, effectively making the contentsinaccessible for most. Reliable access to power, in addition to economic barriers, are very preponderant as well. Nevertheless, the implementation of communication technology is of extreme importance in mitigating the gap between developed and in-development countries, as well as empowering their populations.

In Africa, there are still many countries without any cable connection. The countries with the highest number of subsea cables landing stations are Egypt with 15 and South Africa and Djibouti with 11 cables each.

The number of connections between Africa and the world. The number of connections between Africa and the world.

The predicted investments in Africa will imply a greater need for data centers. At the moment, these are located in South Africa and Nigeria. This location corresponds more or less with the countries where there are more cable landing stations – in other words, countries with more and better infrastructures. Either because they have a bigger need for services, or because they are more stable, those are the places where companies will want to put their new data centers in.

Picture 1.png

Partly because the country with the largest number of data centers in Africa still has 20 times less centers than in Europe, Africa could become the next big battleground for companies vying for a stake in the world stage.

Picture 1.png

[1] “(…) fictional cosmic entity created by writer H. P. Lovecraft and first introduced in the short story “The Call of Cthulhu” (…) Lovecraft depicts it as a gigantic entity worshipped by cultists, in shape like an octopus, a dragon, and a caricature of human form.” (Wikipedia)

André Rodrigues André Rodrigues Daniel André Daniel André Laura Osório Laura Osório

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: