Telia Carrier: We must build a strong business case for subsea investment

Despite a surge in demand for capacity across the globe, sky high capex commitments are making operators think twice about laying new cables

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With the Submarine Networks Europe 2018 event just around the corner, Total Telecom spoke with Mattias Fridström, chief evangelist and vice president at global wholesale carrier, Telia Carrier, to discuss the key issues affecting the subsea telecoms cabling industry.

TT:         What challenges are operators facing in the subsea sector today?

MF:        There is absolutely a need for new cables as traffic is still growing at a relative high pace. The big challenge is still to build a good business case around these investments. Prices in the market for subsea capacity falls every year and even though new systems transport more capacity per fibre pair than they did yesterday, the cost to install them is still very significant. The return on the investment is quite long thus building on speculation is not an option anymore. You need to have a clear view of who your customers will be and exactly they need.

TT:          What new technologies are coming to the market to help keep costs down?

MF:        The subsea sector has always been very good at mixing equipment from different vendors, thus keeping the cost down while still being able to upgrade older systems with significant amount of capacity. This has really helped the carrier industry as with limited new cash resources significant upgrades have been achieved. New modulation formats in new boxes will obviously also help the industry keeping the cost per Mb down to levels where the market can accept them.

  

TT:          Which new markets are looking particularly interesting to you at the moment?

MF:        Any market with growth is of course of interest but with a significant amount of new subsea cables installed towards South America I must say that area is of big interest. The underlying need for more capacity seems to grow at a significant pace and the need to access the global internet is a big need for most local providers in the area.

Africa will always be interesting but still high prices prevent us from doing major actions on that continent.

 

TT:          What challenges do these markets pose and how do you plan to overcome them?

MF:        One challenge is still the relative quite high price for connectivity in these markets. It holds the traffic growth back quite a bit. This will most likely be overcome over time as we have seen the same pattern on all markets - in the end prices usually comes down to what they are in central Europe and North America. That’s when the real traffic growth will come. 

 

TT:          What are you looking forward to most about the Submarine Networks Europe event?  

MF:        Every time the industry meets new topics and challenges come up, new business models are discussed and new projects are being looked at. Every time I go, I feel that there couldn’t possibly be anything new this time, but every time I am surprised. There are many things you would never have heard about unless you have been to the event. It gives me a lot of new ideas for where to go next and what projects to find out more about. These are all the things I very much look forward to and why these events still have such a relevance.

 

Mattias Fridström will be speaking at the Submarine Networks Europe 2018 event in London. From the 20-21 February 2018, the event will analyze every aspect of the subsea cabling industry, with a lively conference agenda and round table sessions.