What We have Realized About Wavelength Pricing From The 2024 Convention Circuit Thus Far

Midway by 2024, TeleGeography’s pricing staff has logged a number of frequent flyer miles on the convention circuit. From PTC in January, to Capability occasions in March, and ITW later within the spring, we have been amassing as a lot pricing intel as attainable.

As we sift by our notes—particularly our newest ITW findings—we start to see a clearer image of what is taking place with wavelength pricing around the globe.

New submarine cable methods are all the time a degree of emphasis at conferences. The cardboard shortages and provide chain points that stalled new deployments, stabilized costs, and dominated conversations in 2023 have largely been resolved.

Whereas financial inflation nonetheless impacts some pricing schemes and mission funding, the surroundings for brand spanking new connectivity endeavors is way more healthy than a couple of years in the past. Funding in new submarine cables is surging, with the worth of recent cables getting into service from 2024-2026 forecasted to achieve over $10 billion. 

Whereas financial inflation nonetheless impacts some pricing schemes and mission funding, the surroundings for brand spanking new connectivity endeavors is way more healthy than a couple of years in the past. Funding in new submarine cables is surging, with the worth of recent cables getting into service from 2024-2026 forecasted to achieve over $10 billion. 

Nevertheless, the impacts investments have on every area differ.  

Excessive-Capability Cables Make Their Mark

In areas the place new high-capacity cables have entered service, value erosion is accelerating. Africa is a good instance of this. With the current launch of Equiano and anticipation of 2Africa in 2024, the Johannesburg-London route is flush with new provide and competitors, fueling value erosion.

Between Q1 2021 and Q1 2024, weighted median 100 Gbps costs dropped 24% yearly to $46,863. And so they aren’t stopping there. Reported low costs at ITW prolonged all the way down to $25,000.  

Latin America is an identical case, nonetheless feeling the results of recent cables, various fiber pair possession, and upgrades to present methods. To not point out the anticipation of recent cables coming on-line within the subsequent yr or two.

Worth declines on the core Miami-São Paulo route topped 28% yearly over the previous three years. With the Firmina cable scheduled to launch later this yr—additional growing provide on this already aggressive route—it is protected to imagine that costs will maintain tumbling. 

Weighted Median 100 Gbps Wavelength Costs & CAGR Worth Decline on Choose Worldwide Routes

Asia’s Costs Stay Steady

On routes to and inside Asia, nonetheless, initiatives stay delayed and costs are nonetheless secure. That is largely on account of geopolitical and environmental points that proceed to plague new methods and upgrades.

Over the previous three years, 100 Gbps costs on Los Angeles-Tokyo and Singapore-Tokyo decreased simply 9% and eight% compounded yearly. However we’re on the cusp of an enormous inflow of recent capability in these areas between 2024 and 2026.

Throughout the Pacific, the launch of JUNO anticipated by year-end 2024 has the potential to additional decrease prices on the Los Angeles-Tokyo route, whereas Echo and Bifrost will assist erode the premium on the Los Angeles-Singapore route once they enter the market in 2025.

Inside Asia, ADC, SEA-H2X, SJC2, and ALC will come into service over the following two years with a variety of possession. This nearly definitely ensures accelerated value erosion, particularly in secondary markets reminiscent of Indonesia, Malaysia, and the Philippines.  

Infrastructure progress has been stalled on the route between Europe and Asia as nicely and provide stays extraordinarily restricted. This isn’t solely on account of delays in new methods and upgrades due to geopolitical points. Current cable faults to AAE-1, EIG, and SEACOM/Tata TGN-Eurasia within the Purple Sea have compounded the difficulty.

Infrastructure progress has been stalled on the route between Europe and Asia as nicely and provide stays extraordinarily restricted. This isn’t solely on account of delays in new methods and upgrades due to geopolitical points. Current cable faults to AAE-1, EIG, and SEACOM/Tata TGN-Eurasia within the Purple Sea have compounded the difficulty.

Because of this, 100G costs on the important thing Marseille-Singapore route decreased simply 1% yearly over the previous three years. At ITW, some suppliers reported even fetching increased costs from clients on account of provide shortage.

However this is not anticipated to final eternally. Whereas the timeline for cable repairs is unsure, attendees hoped that after Purple Sea faults are fastened and deliberate cable initiatives are accomplished, value tendencies would return to historic norms. 

The Impression of Google Cables on the Pacific

One other sizzling matter throughout our ITW conversations was Google’s deliberate subsea cable exercise within the southern Pacific Ocean.

Two proposed initiatives drew dialogue throughout and shortly after the convention: Humboldt—which might join Chile with Oceania—and the lately introduced Umoja system—which might join South Africa with Australia.

These be a part of Honomoana and Tabua, which had been introduced earlier this yr, as a part of the Pacific Join initiative. The system’s two introduced companions, Telstra and Vocus, are well-known gamers within the Oceania market.

Google is promoting entire and partial fiber pairs on its personal cables. The quantity and sort of events buying pairs can have a big effect on future value erosion.

TeleGeography clients with entry to our pricing suite can learn extra of our convention takeaways. Customers can log into their TeleGeography account to learn extra.