Wednesday, 21 February 2018

OTT players will be the key to financing future subsea projects

By Chris Kelly, Total Telecom
Wednesday 07 February 18

Over the next 18 months, IoT and cloud based technologies will emerge as key drivers of rising capacity demand for cable systems across the world

The subsea cabling sector is increasingly looking for investment from OTT players, as it attempts to meet spiralling demand for additional capacity, according to industry experts. "The subsea industry is facing a dramatic increase in capacity demand, driven by content providers (OTTs)…

The subsea cabling sector is increasingly looking for investment from OTT players, as it attempts to meet spiralling demand for additional capacity, according to industry experts.

"The subsea industry is facing a dramatic increase in capacity demand, driven by content providers (OTTs), due to internet penetration and broadband access networks (4G and Fibre to the Home) and the improved capability of mobile devices. Multiple new projects are coming into force mainly financed by OTTs with a private model (with a carrier as project manager). The traffic carried is moving from the carrier’s backbone traffic to the OTTs backbone traffic," said Giuseppe Sini, head of international business unit, at Italian telecoms firm, Retelit. 

Sini believes that the industry is in the process of refining a new business model, that will allow it to source revenues from new markets.

"The Industry is now looking at OTTs as investors more than financial institutions or infrastructure oriented funds," he explained. 

There will also be a fundamental shift in the dynamics that influence the market, as the Internet of Things and cloud based technologies start to drive exponential growth in demand for subsea capacity.

"The next 18 months will see a lot of new projects driven by the factors stated above (content) but a new trend will start to emerge in around an 18-month time frame: IoT and Cloud driven traffic will increase dramatically with a completely different dynamic and patterns from the current content driven model. New players will appear in the marketplace with completely different business drivers. Technology evolution will enable this new generation of players to emerge and the Industry will face a period of change again," added Sini.

Retelit owns and operates 25,000km of ultra-fast subsea cabling linking Europe and Asia via the ports of Marseille and Hong Kong.  

Giuseppe Sini, will be speaking at this year's Submarine Networks Europe event. Sini will be sharing his expertise during a panel session focussing on the emergence and evolution of new business models in the subsea sector.

Held from the 20th – 21st February, Submarine Networks Europe will bring together the key players from the international subsea cabling sector.  

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