apac submarine cable system Market

The APAC submarine cable system market is expected to grow from US$ 235.85 million in 2021 to US$ 546.78 million by 2028; it is estimated to grow at a CAGR of 12.8% from 2021 to 2028.

Fiber-optic cables that are laid in the ocean, known as submarine cables, are responsible for transporting over 99% of intercontinental communication traffic, making them crucial for global connectivity. Currently, there are over 500 subsea cables in operation, varying in length from under 50 miles for those connecting nearby islands, to over 10,000 miles for cables crossing the Pacific. While some cables are used to connect a single connection line across a body of water, others have multiple landing points that connect multiple countries. These cables are the unsung heroes of worldwide communication, providing the necessary infrastructure for seamless and efficient data transfer.

The APAC submarine cable system market analysis involves key stakeholders such as service providers and end-users. Service providers are the companies responsible for supplying and installing submarine power cables, which includes offering services such as desktop studies, marine route surveys, permitting, cable procurement, civil construction at each cable landing site, vessel logistics, and submarine cable deployments and maintenance services. These companies possess specialized assets, trained personnel, and experienced subcontractors to complete turnkey projects. They also have an extensive service portfolio, offering project management, installation, and commissioning services and marine and maintenance operations conducted by cable ships. The increasing demand for submarine cable systems is expected to positively impact the APAC submarine cable system market size. Service providers cater to this demand by providing their services to install and maintain these systems.

The APAC submarine cable system market is primarily utilized by three major end-users, namely telecommunication, power generation, and oil & gas. Within this market, the telecommunication industry relies heavily on submarine cable systems to transmit various types of signals such as telephone conversations, internet data, emails, and television broadcasts. The increasing demand for internet bandwidth and fiber connectivity across APAC nations is driving the need for submarine cable installations in the telecommunication industry. Furthermore, the growing demand for clean energy generation, particularly offshore wind energy, is also contributing to the adoption of submarine cables for interconnecting grids between countries. As a result, the deployment of submarine cable systems in the APAC market is increasing due to the rising demand for internet bandwidth, investment in the grid, and content providers' demand.

In the Asia-Pacific region, there is a strong focus on promoting strategic partnerships that span multiple sectors, borders, and energy vectors in order to accelerate progress towards achieving net-zero carbon emissions. Many of the low-cost renewable energy resources are located in remote and sparsely populated areas far from major population centers, and in some cases, they are located across international borders from the areas where the energy is most needed. As a result, there is a growing need for cross-border electricity trade that is enabled by the connectivity of power grid infrastructure. This requires the optimal management of energy surpluses and deficits across the region. The APAC submarine cable system market is experiencing rapid growth due to the increasing demand for energy, driven by a growing middle-class population and greater access to modern energy sources. Regulatory support and the revision of existing policies to facilitate cross-border electricity trading are also contributing to the growth of the market.

The APAC submarine cable system market is expected to experience positive growth in the coming years due to the expanding installation of new submarine cable systems. For example, Savills Korea and KT signed an agreement in February 2022 to jointly develop a 9,000 km submarine cable system that will connect six countries in the APAC region, including South Korea, Japan, Taiwan, Indonesia, Philippines, and Singapore. This initiative is a response to the growing demand for global data capacity and is expected to fuel the growth of the APAC submarine cable system market. In addition, Sumitomo Electric Industries and Seaway 7 signed a Memorandum of Understanding in February 2022 to provide subsea cable engineering, procurement, installation, and commissioning services for offshore wind projects in Japan and other countries in the APAC region. This initiative is intended to achieve Japan's offshore wind capacity target and is also expected to drive the growth of the APAC submarine cable system market. Overall, the installation of new submarine cable systems and significant initiatives for upcoming projects are anticipated to fuel the growth of the APAC submarine cable system market. These factors are contributing to the growth of the market in the APAC region.

The APAC submarine cable system market is classified into two segments based on service: installation services and maintenance & upgrade services. Cable installation involves landing cables onshore and laying them across oceans or bodies of water until they reach the other side. During installation, cable handling and monitoring are critical factors, as failure to adhere to minimum bending radius, actual strain, or other limits can cause cable damage. The installation of submarine cables is an expensive and highly engineered operation executed by large construction vessels in harsh environments. Submarine cables consist of optical fibers that carry data and a conductive material that transmits current used to feed optical amplifiers along the subsea cable. These cables are coated with several layers of protective materials to guard against water and corrosion. Maintenance and upgrade services are provided by submarine cable service providers for efficient transmission of power, data, and information. Submarine cables can fail due to fishing activity, turbulent weather, improper installation, earthquakes, and dredging. The price of maintenance services depends on factors such as cable length, cable type, time consumed for maintenance, type of maintenance, and complimentary services provided. Increasing internet penetration, growth prospects in the telecom industry, and the rise in transmission of power are prominent factors driving the demand for maintenance activities and, in turn, contributing to the growth of the APAC submarine cable system market.

The APAC submarine cable system market players includes NEC Corporation, S. B. Submarine Systems Co., Ltd., SubCom, LLC, NTT WORLD ENGINEERING MARINE CORPORATION, and Alcatel Submarine Networks among others.

Impact of COVID-19 Pandemic on APAC Submarine Cable System Market

In 2020, the global COVID-19 crisis had a significant impact on APAC countries like China, India, and Japan. The imposition of lockdown measures and a slowdown in manufacturing led to a reduction in the production of submarine cables. As a result, the installation capacity of submarine power cables declined by approximately 3-4% in 2020 compared to the previous year, and the number of oil and gas rigs also decreased significantly in the APAC submarine cable system market. The pandemic also led to a temporary shutdown of businesses and factories and restrictions on international movements. Although the closure of manufacturing plants did not immediately affect global connectivity, it did delay the deployment of new systems. However, it is expected that the APAC submarine cable system market will begin to recover from the impact of COVID-19 in 2021 and beyond, with the resumption of projects for renewable energy grids and communication networks.