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Global Submarine Optical Fiber Cable Market Size and Share Analysis 2023-2028
The Submarine Optical Fiber Cable Market is projected to reach USD 6.42 billion by 2028, growing at a CAGR of 12.10% during the forecast period (2023-2028), with an estimated size of USD 3.63 billion in 2023.
Submarine optical fiber cables are cables laid on the seabed beneath the sea. Initially used for telegraphy traffic, these cables have evolved to carry telephone and data communication traffic through advancements in technology. Presently, these cables utilize optical fiber technology to transmit digital data such as internet, private data traffic, and telephony.
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USD 3.3 billion in 2021
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The increasing investment in high-speed internet infrastructure is a key driver for the growth of the submarine optical fiber cable market. The continuous surge in data generation and transfer worldwide is another significant factor propelling the market. As a result, many internet backbone operators are expected to invest in submarine optical fiber cables during the forecast period.
Submarine cable systems handle over 99% of intercontinental communication traffic, making them critical enablers of global connectivity. While the regional telecom industry is advancing at a rapid pace, particularly in countries like China and India, internet infrastructure remains a challenge in several parts of the world.
As internet access becomes more widespread among populations in developing regions, the next focus for strengthening the cable network may shift to emerging markets worldwide. Consequently, the submarine optical fiber cable market is seen as an opportunity by various companies and government agencies.
The rapid increase in mobile broadband penetration is a significant contributing factor to the market’s growth. The global demand for smartphones is rising due to factors such as increasing disposable income, the advent of 5G technology, and the development of telecom infrastructure. According to Ericsson, smartphone subscriptions worldwide reached 6,259 million in 2021 and are projected to reach 7,690 million by 2027.
Although submarine cables are protected with layers of materials like silicon gel, wires, plastic, copper sheathing, nylon yarn, and polyethylene insulation to ensure the safety and longevity of the optical fibers, periodic maintenance remains essential, which can be costly. The high installation and maintenance costs pose challenges to the market’s growth.
The outbreak of COVID-19 has significantly increased data usage, driving the demand for submarine optic fiber cable networks. The pandemic has also reshaped consumption patterns, with wider populations embracing new technologies. This is expected to drive investments in subsea cable networks in the post-COVID period.
The market is segmented based on various factors, including geography.
Segmentation by Geography
The smartphone industry has experienced remarkable growth in recent years, driven by the increasing acceptance and prevalence of digital technologies and the mobile-first approach adopted by companies. Ericsson predicts that the global number of smartphone subscribers will reach 7,790 million in 2028, up from 6,260 million in 2021.
In the business environment, particularly in e-commerce, as businesses grow, the volume of website traffic and the number of people simultaneously accessing the site also increase. This surge in traffic necessitates a higher bandwidth capacity to accommodate the load. These factors collectively contribute to the expected growth of the smartphone market during the forecast period.
While the smartphone industry is approaching maturity in developed countries, there are still immense growth opportunities in emerging regions. According to Ericsson, Northeast Asia leads in terms of the number of smartphone subscribers (1,990 million in 2022), followed by China (1,570 million) and Southeast Asia & Oceania (910 million).
These factors positively impact the growth of the market, as increased smartphone subscriptions drive internet consumption and data generation, consequently fueling the demand for data centers and other digital infrastructures that require high-bandwidth connectivity.
The need for increased bandwidth, ultra-low latency, and faster connectivity is shaping civilizations, revolutionizing industries, and significantly enhancing day-to-day experiences. Previously considered futuristic, applications such as e-health, networked vehicles and traffic systems, and advanced mobile cloud gaming are now becoming a reality.
Bandwidth requirements typically experience substantial annual growth, especially for networks that heavily rely on services like streaming video platforms. With the growing availability of 4K video content and the shift towards game downloads, the trend is shifting towards higher bandwidth services, exemplified by platforms like Google Stadia offering game streaming.
Submarine cables play a crucial role in carrying over 97% of all internet traffic worldwide, serving as the backbone of global connectivity. Given the internet’s ability to connect people globally, international traffic continues to grow. The Asia-Pacific region accounts for about half of the world’s internet traffic and is driving the demand for submarine communication cables. To address the need for faster internet services in the trans-pacific region, the World Bank and the Asia Development Bank have provided funding for new cable systems.
In March 2021, Google, Facebook, and Pacific Light Data Communication (PLDC) collaborated on a revised proposal to establish six new transoceanic cables connecting North America and Asia. These cables are expected to increase subsea capacity in the trans-pacific region by approximately 70% and provide internet connectivity to underserved locations.
In December 2021, the United States, Australia, and Japan jointly funded the construction of an undersea cable aimed at improving internet access in three small Pacific countries. This initiative will bring faster internet connectivity to Nauru, Kiribati, and the Federated States of Micronesia.
In February 2022, following the recommendations of Team Telecom, the Federal Communications Commission (FCC) granted the Submarine Cable Landing License for the Pacific Light Cable Network (PLCN) system. PLCN connections between the United States, Taiwan, and the Philippines are now commercially operational. Team Telecom entered into National Security Agreements with Google LLC and its subsidiary G.U. Holdings Inc., as well as Meta Platforms Inc. (formerly Facebook Inc.) and its subsidiary Edge Cable Holdings USA LLC, to ensure data protection on the Pacific Light Cable Network (PLCN) system. This undersea fiber optic cable system will link the United States, Taiwan, and the Philippines. As a result, the FCC has granted Google and Meta cable landing licenses for the PLCN system.
In July 2022, NTT Ltd Japan Corporation, Mitsui & Co. Ltd., PC Landing Corp., and JA Mitsui Leasing Ltd announced the establishment of Seren Juno Network Co. Ltd (Seren), a new company formed to construct and operate JUNO, the largest Trans-Pacific submarine cable system connecting Japan and the United States.
In August 2022, N.E.C. Corporation announced that Seren Juno Network had selected them to build the JUNO Cable System, a Trans-Pacific subsea fiber-optic cable. This cable will span over 10,000 km, connecting California in the United States with Chiba prefecture and Mie prefecture in Japan. The construction is expected to be completed by the end of 2024.
The submarine optical fiber cable market exhibits a high degree of fragmentation, with major players such as Google LLC (Alphabet Inc.), NEC Corporation, Nexans SA, Fujitsu Ltd, and NTT Communications Corporation. These market participants employ various strategies including partnerships, mergers, innovations, and acquisitions to enhance their product offerings and gain a sustainable competitive advantage.
In November 2022, Prysmian entered into a limited notice to proceed agreement worth EUR 220 million (USD 234.50 million) with Samsung C&T. This collaboration forms part of an Engineering, Procurement, and Construction (EPC) consortium with Jan De Nul for the Middle East’s first-of-its-kind high-voltage, direct current (HVDC-VSC) subsea power transmission system. Prysmian will be responsible for designing, supplying, assembling, and testing a symmetrical monopole system comprising four HVDC 320 kV single-core cables with XLPE insulation. Additionally, fiber optic cable systems will be utilized to connect the Al Mirfa onshore converter station to the Al Ghallan artificial island in the Arabian Gulf, off the coast of Abu Dhabi.
In October 2022, NEC Corporation signed a four-year charter agreement with Global Marine Systems Limited in the United Kingdom for an optical submarine cable-laying ship. This strategic partnership enables NEC to strengthen its provision of submarine cable systems and meet the growing demand for such cables amid the global increase in data traffic.
Key companies profiled in this report include Google LLC (Alphabet inc.), NEC Corporation, Nexans SA, Fujitsu Ltd, NTT Communications Corporations, Huwaei Marine Networks Co., PT Communication Cable System Indonesia TBK, LS Cable & System Ltd, Alcatel Submarine Networks Ltd, SubCom LLC, Sumitomo Electric Industries Ltd, Prysmian SpA, JDR Cable Systems (Holdings) Ltd.
Recent Industry Developments
In November 2022, the Greek power grid operator IPTO (Independent Power Transmission Operator) awarded contracts worth over EUR 150 million (USD 159.89 million) to Prysmian Company. The contracts are for connecting the islands of Milos, Folegandros, and Santorini as part of Phase D of the electrical interconnection project in the Cyclades. This project aims to integrate the energy of various islands, including Serifos, Milos, Folegandros, and Santorini, with the Greek mainland power grid. The overall project consists of two undersea power links: the first will connect Lavrio, a city near Athens on the Greek peninsula, to the island of Milos via Serifos, while the second link, granted to Prysmian, will run through Folegandros to connect Milos to Santorini.
In September 2022, Google successfully launched its Equiano cable, a USD 1 billion project that connects Western Europe to South Africa. After arriving in Cape Town the previous month, this submarine Internet cable now holds the distinction of being Africa’s highest capacity cable. Spanning a distance of 15,000 km, it stretches from Portugal to South Africa and features 12 fiber pairs with a design capacity of 150 Tbps. With nine branching points along its route, the Equiano cable was announced by Google two years ago and stands as one of their most extensive submarine internet cables.
In August 2022, Google revealed its plans to establish the Blue Raman fiber-optic cable connecting India to Europe via the Middle East. This ambitious underwater cable project, named after the renowned Indian physicist Chandrasekhara Venkata Raman, aimed to reach Israel by 2022 at an estimated cost of USD 400 million. By strengthening their existing network, Google seeks to enhance connectivity and further expand their technological foothold.
Key Questions Answered
What is the projected size of the Submarine Optical Fiber Cable Market?
The Submarine Optical Fiber Cable Market is expected to reach USD 3.63 billion in 2023 and grow at a compound annual growth rate (CAGR) of 12.10% to reach USD 6.42 billion by 2028.
What is the current size of the Submarine Optical Fiber Cable Market?
In 2023, the Submarine Optical Fiber Cable Market is expected to reach USD 3.63 billion.
Who are the key players in the Submarine Optical Fiber Cable Market?
The major companies operating in the Submarine Optical Fiber Cable Market include Google LLC (Alphabet Inc.), NEC Corporation, Nexans SA, Fujitsu Ltd, and NTT Communications Corporation.