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 will be fascinating to take a better have a look at how these headlines truly impacted the market when it comes to pricing.
Submarine cables are all the time a scorching matter, and 2024 was no completely different. With the variety of delayed methods lastly coming to fruition and cable bulletins all year long, there was plenty of anticipation in regards to the impression of this new provide on markets world wide.
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.
Beneath, I’ve mapped out 100 Gbps wavelength costs versus CAGR worth decline.
In areas the place new high-capacity cables have lately 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 beneath takes a better have a look at routes connecting to and inside Asia that had been hit significantly arduous by provide chain points and delays in new methods coming on-line over the previous few years.
You possibly can 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 slightly bit. With the launch of ADC and the anticipation of JUNO in early 2025, we’re beginning to hear some cheaper price factors available in the market.
So, these are undoubtedly routes to observe heading into 2025. However for now, that slower fee 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 larger than London–New York costs. That’s up from 2.7 instances the worth simply 5 years in the past.
Los Angeles–Tokyo has constantly hovered between 2–3 instances the worth of London–New York. Compared, Miami–São Paulo is now just a bit over twice the worth of London–New York, down from 4.5 instances 5 years in the past.
As we begin to see new methods come on-line, we do anticipate that accelerating worth erosion will assist slender these gaps going ahead. However we don’t count on to ever see a common worth level resulting from variations in underlying prices or completely different demand ranges throughout routes, however some narrowing of that hole going ahead.
We don’t count on to ever see a common worth level resulting from variations in underlying prices or completely 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 development.
This determine highlights whole cable development prices by area from 2023 to 2027.
These prices are forecasted to succeed in over $16 billion over the following few years. A number 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 plenty of new methods are coming to fruition. So, we’re forecasting accelerating worth erosion on these routes for positive.
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 providers is one other scorching matter.
You possibly can examine preserving tempo with capability necessities—and the evolution of IP transit on this planet’s greatest hubs—by downloading my full PTC ’25 slide deck.
