Global deregulation promotes heavy competition in submarine fiber systems
More than $45 billion will be spent on building submarine fiber-optic cable systems around the world from 1999 through 2005, according to a new strategic marketing research report from Frost & Sullivan (Mountain View, CA). According to World Submarine Cable Transmission System Markets, the continuing deregulation of worldwide telecommunications is increasing competition that will drive down service prices and create more demand for better and cheaper networks.
The report examines the markets for submarine-cable systems from both the supply and demand sides, providing revenue forecasts based on contractual values for the entire system, including both land and underwater equipment. In 1998, the world submarine-cable equipment market increased to $6 billion, reflecting a 33.3% growth rate over the 1997 total. Frost & Sullivan attributes that growth rate to satisfying an unmet market demand for capacity on global networks, particularly on transatlantic and transpacific routes.
On the supply side, equipment manufacturers compete on the basis of technological leadership, timely delivery, cost, and the provision of end-to-end solutions. The ability to introduce and incorporate the latest technology is important because product life cycles have shortened to about six months as opposed to the two- to three-year cycles of the past. Delivering new products in a timely fashion is essential, along with innovative pricing and service programs and attractive terms and conditions on contracts.
On the demand side, the submarine-cable-systems service market is more crowded and less predictable than before. An ever-increasing number of international service providers are rapidly complicating the global marketplace. Most notable is the growth of private cables that take the burden of initial capital investment and related risks away from the carriers, providing an attractive alternative for carriers to gain international access. Private cables have gathered a significant portion of the global market by offering independent access and flexible pricing and services.
This report is available by contacting Kimberly Barney at Frost & Sullivan at (650) 237-4383, fax (650) 903-0915, or e-mail: firstname.lastname@example.org.