In 2024, we noticed many telecom headlines within the mainstream media. There have been tales on the night information about submarine cables referring to geopolitics, community outages, and even the potential impression of AI.
At this yr’s Pacific Telecommunications Council convention, I assumed it could be fascinating to take a better take a look at how these headlines truly impacted the market by way of pricing.
Submarine cables are at all times a scorching matter, and 2024 was no totally different. With the variety of delayed programs lastly coming to fruition and cable bulletins all year long, there was numerous anticipation concerning the impression of this new provide on markets around the globe.
Wavelength costs continued their regular decline all through 2024. Throughout key routes, weighted median 100 Gbps costs decreased a median of about 11% compounded yearly over the previous three years.
Now, how these new community investments impression every area varies considerably.
Under, I’ve mapped out 100 Gbps wavelength costs versus CAGR worth decline.
In areas the place new high-capacity cables have not too long ago come on-line, worth erosion is accelerating.
Latin America—which noticed the launch of Firmina in 2024—and Africa—which noticed a large inflow of recent provide from the launch of Equiano—are reporting the best charges of worth erosion.
Compared, on routes with continued delays in new provide, the tempo of worth erosion is slower.
The chart under takes a better take a look at routes connecting to and inside Asia that have been hit significantly exhausting by provide chain points and delays in new programs coming on-line over the previous few years.
You may see throughout the important thing routes featured right here, 100 Gbps costs decreased simply 5% compounded yearly over the previous three years.
That is starting to vary a bit of bit. With the launch of ADC and the anticipation of JUNO in early 2025, we’re beginning to hear some lower cost factors out there.
So, these are positively routes to observe heading into 2025. However for now, that slower charge of worth erosion helps to keep up and even amplify world worth variations.
Listed here are 100 Gbps wavelength costs relative to London–New York.
Marseille–Singapore costs at the moment are about 4.5 instances greater than London–New York costs. That’s up from 2.7 instances the value simply 5 years in the past.
Los Angeles–Tokyo has persistently hovered between 2–3 instances the value of London–New York. Compared, Miami–São Paulo is now just a bit over twice the value of London–New York, down from 4.5 instances 5 years in the past.
As we begin to see new programs come on-line, we do anticipate that accelerating worth erosion will assist slim these gaps going ahead. However we don’t anticipate to ever see a common worth level as a consequence of variations in underlying prices or totally different demand ranges throughout routes, however some narrowing of that hole going ahead.
We don’t anticipate to ever see a common worth level as a consequence of variations in underlying prices or totally different demand ranges throughout routes, however some narrowing of that hole going ahead.
As I discussed, half of what’s fueling accelerating worth erosion is the surge in new cable building.
This determine highlights whole cable building prices by area from 2023 to 2027.
These prices are forecasted to succeed in over $16 billion over the following few years. Lots of that funding is concentrated on connecting to and inside Asia, which we forecast will proceed to gasoline additional worth erosion.
This subsequent determine is from our Transport Community’s Forecast Service. It highlights forecasted 100 Gbps wavelength worth erosion from year-end 2024 out to 2030.
The highest routes—Chennai–Singapore, Los Angeles–Singapore, Singapore–Tokyo, Marseille–Singapore—are routes we’ve been speaking about for the previous few years. There have been delays in community provide, and numerous new programs are coming to fruition. So, we’re forecasting accelerating worth erosion on these routes for certain.
Subsequent, my presentation shifted gears barely to a subject that’s prime of thoughts for a lot of: guaranteeing community range and resilience.
With bandwidth necessities escalating, the launch of recent community companies is one other scorching matter.
You may examine retaining tempo with capability necessities—and the evolution of IP transit on the planet’s greatest hubs—by downloading my full PTC ’25 slide deck.
