Google and other big providers are getting involved in the business of subsea cables. How this is changing the sector?
Big giants of business are getting into the thing of subsea cables in order to increase connectivity.
Microsoft, Amazon, Facebook, and the Big G are all involved in projects with cable operators to lay high capacity connections across long-haul routes.
These are obviously over-the-top providers (OTT), much bigger than other carriers. Their investiments are likely worth billions of dollars.
Why they are acting like this? These giants are the very best of modern software and technology, whereas subsea cables represent a 150-year-old industry.
Because these companies are dealing with such high volumes of data that it makes sense to use this kind of connection, TeleGeography research director Alan Mauldin says.
He continues “These companies do not rely on third parties. This gives them a cost advantage and control to do the project as they wish”.
Alan Mauldin also states that we will see more new cables coming and the mode we will see is one carrier partner teaming up with multiple OTTs which take an agreed number of fibre pairs.
THREAT TO CARRIERS
Obviously the question that often raises about these projects is whether they pose a threat to wholesale operators.
Despite any precondition Maudlin doubts it: “The arrival of an OTT might lead to a reduction of whole sale revenues, but they won’t build a submarine cable and rent out the excess capacity.”
Concluding, many investors in the subsea industry see the entrance of these OTT providers as a great business chance, relating to the big amount of money the will introduce in the sector.