In Conversation with Ken Hunnisett from Triple Point, by Finance & Leasing Association
18 January 21
18 January 21
The commonly held belief is that satellites orbiting hundreds of miles above us are responsible for the wonders of the internet. After all, there are over 2,700 satellites in Earth's orbit, 1,364 of which are communication satellites. What’s more, Elon Musk’s Space X does seem to dominate the news on a daily basis.
However, many will be amazed to note that 98% of all data, all our communications today, is carried by vast networks of cables under the sea. There are more than 400 operational submarine cables today – stretching over 1.2 million km (over three times the distance between the earth and the moon).
So, when you next send an email to your cousin, travelling to Tonga in the South Pacific, remember that email is not heading into the sky, it is travelling at 99% the speed of light, under the water via a mesh of submarine cables. The reasons why are simple: submarine cables transmit substantially more data than satellites at far lower cost.
Today, submarine cables are the invisible information highways driving the global internet. They form the spine of the digital infrastructure we rely on which also includes data centres, cellular base stations, satellites and signal transmitters, that together power our digital world.
Since the middle of the nineteenth century, submarine cable networks have connected the world’s continents, geographies and remote destinations, spawning the communications revolution we recognise today.
When Queen Victoria hailed the "great international work" via telegram to US President James Buchanan, after the first European and North American continents were connected by a 4,000 km long, 1.5cm wide cable in 1858, the message took over 17 hours to deliver, at 2 minutes and 5 seconds per letter by Morse code.
Unsurprisingly, the technology has advanced just a little since then. While still resembling a very long garden hose with a cable only a few centimetres thick, fibre optic cables are built to survive the oceans’ harsh conditions. The capacity of a modern fibre optic cable is in the order of tens of terabits – typically the equivalent of running over 100 million zoom video calls per second!
Modern fibre optic submarine cables are therefore incredibly powerful. Their design has evolved at rapid pace to enable high communication capacity, speed and low latency. The extraordinary pace of improvement has also been met by an enormous demand for data and online services, as well as an expectation for fast and reliable internet access.
Since homeworking became the norm in March 2020, demand for broadband communication services soared. In the UK internet traffic increased by 78.6% over the one-month period from February 27 to March 31 2020, and download speed decreased by 30.3%. In essence, in 2020, our global digital framework was put to the limit and has shown clear demand for further investment and modernisation of mission critical infrastructure.
What’s more, this demand will continue to increase as providers meet rising consumer and business expectation and global industrial competition for further technological growth.
The world is expected to create more than three times the data over the next five years than it did in the previous five. This data will be generated in the course of emerging technologies, including IoT devices which includes sensors in homes, factories and cities, as well as driverless cars, artificial intelligence and fifth generation cellular technology (5G). The latter has the potential to accelerate mobile download speeds by up to 100x compared with fourth generation (4G) technology.
For submarine cables, the spine of the global digital infrastructure framework, much more will be done. Since 1990, over $50bn has been invested in the submarine cable market. Yet with a 25-year lifespan, 11 of the 14 existing transatlantic cables are expected to retire in the next 5 years. This represents a huge investment opportunity. As the world takes its next step forward in our global digital revolution, this is an industry that is expected to grow by 7.3% CAGR to 2027.