Page 29 - Analysis Report of Global Market in the Submarine Cable Field (2017)

Table 3 International export bandwidth during “The 12th Five-Year” Table 6 China’s relevant newly constructed international submarine
period was far below target cable statistics

2. Conclusion: International + domestic have strong
impetus, demand for submarine cable’s construction begin to show
turning point.
It has been almost 17 years after the first batch of international submarine
cable construction peak in the end of 90s. Many international submarine
cable will enter into retirement period soon. The frequent happening of
natural calamities like earth quack, tidal wave or unintentional offshore
operational damages have resulted to the slowdown even termination
of international communication, which also showed significantly the
insufficiency of international submarine cable construction. Meanwhile,
with the development of submarine cable’s new technology, maintenance
cost of unit capacity is higher than new submarine fiber cable system, the
international submarine cable’s construction is marching into a period of
generation renewal.
Table 4 Demand for international export bandwidth during “The 13th
Five-Years” period further speed up On the other hand, with the development of the global Internet and cloud
services, the demand for Internet information in China is also increasing.
China has already raised Internet bandwidth construction and security
construction to the national strategic level. According to the data statistics
of Ministry of Industry and Information in 2015, China’s international
export bandwidth is only 3.8Tbps, which is far below than the 20Tbps plan
in 2020. The international telecommunications market flow is expected to
keep increasing speed at more than 20% in the next few years (above the
IP flow chart and growth rate), while submarine cable as the main means of
international communication transmission will develop fast driven by the
double power of market and policy.

3. Domestic submarine fiber optical cable system construction capacity
is improving rapidly
As the international communications business of China started very late,
the industrial chain is not mature enough. In the meantime, as the top of
Pyramid of cable development, submarine fiber optical cable’s development
investment and difficulty is great. Before the domestic market demand was
small, while the submarine cable is mainly used for military construction.
Small market size could not support long-term investment which resulted
that only very few domestic companies have mastered the relevant core
technologies. In contrast, some European, American and Japanese enterprises
own everything including research and development, production, testing,
Table 5 The exported submarine cable in China’s territorial operation
services promotion, as well as submarine communication equipment of 10G and 40G
and constructional team. The current international submarine cable market is
monopolized by very few multinational giant enterprises of French Alcartel
Lucent, American Tyco, German NSW, Japan NEC etc.

The domestic market has been mainly covered by submarine cable
manufacturer of Hengtong Optic-electronic, ZTT etc., branch device
suppliers of HUAWEI Marine, Fiberhome Communication etc.; “Turn
Key” general contractors of HUAWEI Marine, Fiberhome Communication
etc. rapidly established the integrated ability.
the fourth quarter of 2017. From the statistics since 2015, the length of
newly constructed submarine fiber cable covering China’s territory or 4. Conclusion: the accumulation of domestic submarine optical
related to China’s invested constructional submarine cable is more than cable’s technology strength is sufficient, integrated industrial chain
100 thousand kilometers. In the next few years, these submarine cables is formed
will also start to service.

29