Undersea cables transport 99% of intercontinental data. According to Telegeography, more than $10tn of financial transactions cross subsea cables every day. To say subsea cables are important would be an understatement.
This year has seen unprecedented headlines concerning subsea cable cuts thanks to high-profile incidents in the Red Sea, the West Coast of Africa, and elsewhere. In particular, concerns around network ‘bottlenecks’ have come into sharper focus, with the potential for multiple outages at once causing many to rethink strategic partnerships to emphasise redundancy and availability, alongside bandwidth and latency requirements. While the majority of cable cuts are accidental, these incidents have highlighted our global dependency on this critical infrastructure.
Impact – what do outages mean for business?
Infrastructure damage is never a good thing, but the impact of cable outages varies significantly. While one cable being damaged happens occasionally, multiple simultaneous outages – as happened in March in the Red Sea – is significant. Subsea cables carry critical data flows and are strategically placed to minimise the distance or latency between terrestrial landings. There are often multiple cables travelling the same, shortest path to and from major hubs, meaning that if one is damaged, traffic can be rerouted to a different cable connecting the same two areas with relative ease. The Red Sea has sixteen Subsea cables – accounting for approximately 17% of all international traffic – in close proximity along the seabed. One errant anchor damaging multiple cables has a very large impact!
The easiest way to think about it is if one lane on the motorway is closed, most drivers will still try to use the remaining lanes to get from A to B because it’s designed for fast traffic. However, if multiple lanes are closed, you would likely consider taking the more scenic route to avoid congestion.
But what is the real impact of such a detour? For most internet users, it is small. Certain cloud-based applications that use re-transmissions (ie, data is resent until received) are not impacted, but applications that only send data once, like video applications, could see minor quality issues. Any additional latency impact would likely be measured in milliseconds, which is negligible outside of very latency-sensitive applications, like in high-frequency trading environments.
The impact is exacerbated though, when not spread equally. While some carriers’ cables are cut and their traffic rerouted, others may not be impacted and continue to carry traffic across the lowest latency paths. Consequently, businesses working with providers with damaged cables may be at a competitive disadvantage. Redundancy and diversity are key.
One of the areas of obvious concern for any subsea infrastructure operator is maintenance and repair activities, with limited specialist vessels available. Some outages have added concerns around crew safety and the viability of insurance for vessels, which can have a significant effect on repair times.
Investment – What is the industry doing to alleviate similar issues
The industry typically handles the impact of subsea outages well, with multi-terabytes of data rerouted to avoid damaged cables and minimal impact to the majority of end users. However, it could be said that we have come close to a much larger issue, with the Red Sea incident in March not far away from having the largest global impact in 25+ years of subsea operations, if more cables were damaged.
While the short-term fix of rerouting can work, it is clear that new and diverse routes into the market are critical to avoiding bottlenecks and the potential for similar incidents in future.
We are starting to see more traffic moving through Iraq and Turkey with several parties interested. EXA Infrastructure recently signed a deal with SOCAR of Turkey to provide more route diversity on our own network. Oman, KSA, and Egypt through the Mediterranean have also emerged as an alternative to avoid Yemen, understood to be a more stable route for traffic through the Middle East and into Europe.
Terrestrial network alternatives (ie. ones that don’t travel under the sea and can avoid anchor risks) present a viable alternative. Repair times are much shorter, giving increased confidence in network availability, but their lesser performance doesn’t negate the necessity of undersea cables.
In terms of building new alternative networks, any subsea cable project can take up to five years from planning to completion, with each cable costing $300-400m depending on the number of fibre pairs used and distance. Outside of vessel availability, there are political rather than practical challenges to a successfully executed build, with permitting and licencing challenges in certain regions being at the forefront.
Nevertheless, investment is flowing into subsea at record pace. There is recognition from businesses and governments in terms of critical infrastructure status. It is well understood that these networks are the circulatory system of the internet and upgrades and net-new cable projects need to progress as quickly as possible.
Initiative – what can businesses do?
From an ‘end-user’ perspective, it is fair to say that the majority of global industry segments have huge and very well-thought-through bandwidth requirements today and need reliable service to underpin their market offering. From a network provider perspective, building low latency, highly available, diverse and secure connections between various locations is required to satisfy these demands.
Businesses today are very savvy in terms of their network choices and can dictate what providers they use for all of their requirements from network to Datacentre colocation to cloud applications.
March has shown that a reliable supplier that can guarantee alternative routing is of the utmost importance. Businesses in financial services can take the initiative to be proactive, and ask their suppliers about route diversity, and their commitment to investing in upgrading current paths and adding new ones.
Diversity, in parallel with strong contractual commitments on protection of services is key. Redundancy, business resiliency and continuity planning, together with risk mitigation strategies are some of the items encouraged for discussion when procuring any level of network products offered in the market today.