Submarine Cable System Market Trends

Market Driver - Rapid Deployment of 5G Internet Services in Developing Countries

The world is moving towards more digitization at a faster pace than ever expected before. While developed nations around the globe have already started adopting the new age 5G technology, many developing nations in Asia and Africa are also catching up quickly. For developing countries which are still working on building their digital and broadband infrastructure, 5G comes across as an excellent opportunity.

Many of these countries see ubiquitous high-speed internet access through 5G as crucial for digital transformation across key sectors. It is expected to enable new applications in areas like telemedicine, distance education, digital money and financial inclusion. All these factors have convinced governments across Asia and Africa to prioritize 5G rollouts in the coming years. Major initiatives are being planned to deploy 5G infrastructure in both urban and rural regions.

Thereby, rapid 5G adoption in emerging markets is expected to drive huge investments in submarine cable system market over the coming decade.

Market Driver - Rising Investments in Offshore Renewable Energy Projects

According to estimates, the global offshore renewable energy capacity may exceed 600 GW by 2030 from current levels of around 120 GW. Developing new offshore renewable farms at distant offshore locations requires substantial infrastructure for connectivity. The power generated needs to be brought ashore through undersea transmission cables. These submarine power cables have emerged as a crucial interconnect between offshore renewable plants and onshore power grids.

Nations and states seeking to achieve green energy goals are announcing massive renewable projects both near-shore and in deeper offshore zones. However, constructing such projects in remote sea areas without the required power cable infrastructure is difficult. This is boosting investments in specialized high voltage direct current (HVDC) submarine transmission cable industry.

The rising focus on harnessing ocean renewable energy reserves is propelling the submarine cable systems market forward. Investments are accelerating to deploy enabling transmission infrastructure between offshore energy sites and mainland power grids.

Market Challenge - High Installation and Maintenance Costs of Submarine Cables

One of the major challenges facing the submarine cable system market is the high installation and maintenance costs associated with these cables. Laying submarine cables on the ocean floor requires specialized equipment and ships that can withstand harsh ocean conditions. It takes a significant amount of time and capital to plan and execute cable laying projects across international waters.

Additionally, periodic maintenance and repair works are needed to ensure smooth operation of these cables throughout their lifespan, which is typically around 25 years. Cable repairs require locating and accessing damaged sections underwater, which involves further expenditures.

Natural disasters such as underwater landslides, earthquakes and typhoons also pose risks and can damage submarine cable systems, necessitating expensive repairs. The high costs of installation and maintenance limit the number of players who can viably enter this market and make route expansion or network upgrades challenging.

Market Opportunity - Increasing Demand for Efficient Data Transmission Technologies

One significant opportunity for the submarine cable system market is the rapidly increasing global demand for higher bandwidth and more efficient data transmission technologies. Over the past decade, there has been an exponential rise in internet usage, mobile data consumption, cloud computing and implementation of 5G networks worldwide.

Technologies like machine learning, artificial intelligence, internet of things, autonomous vehicles and augmented/virtual reality are also generating explosive data traffic. This vast and ever-growing consumption of data globally can only be supported through high-speed submarine cable systems that directly connect the main economic hubs and data centers across regions.

The large capacity and high reliability offered by modern submarine cables make them indispensable for handling current and future data transmission needs. Newer technologies and applications continue to push the boundaries of data demand. Thereby, submarine cable system market players stand to benefit from the necessity of regular network upgrades and expansion projects to lay new cables.