Pacific Subsea Cable Headaches: The Singapore/USA Route

In the past most HK and Singapore traffic to the US was routed via Tokyo due to the lack of direct single cable links. The 100G MRCs were and are still today high with the range from the lower 30s to mid-40s. Obviously, the Tokyo routing latency penalty is also very high. It is possible to get 100Gs in the twenties, but only a few 100Gs are available at that price point. 

In recent years the hyperscalers have recognized that current routing raises cost per bit, latency, and makes Tokyo a single point of failure on their Pacific networks. As a result, new American Tech cables connect Singapore directly to San Jose Equinix or Los Angeles Coresite data centers. For example, META is the lead consortium partner on the new 12 fibre pair Bifrost cable that lands at Grover Beach, California, Rosarita, Mexico, and Winema, Oregon. Keppel owns several fibre pairs, but only sells fibre pairs and spectrum. Telstra has capacity, but their pricing is not aggressive. In general, three year 100G MRCs on Bifrost bottom out around $32K. The fundamental problem is that META is kept six fibre pairs for itself and only Keppel is seeding the wholesale market. Little wholesale capacity, one seller. Not a good recipe for reasonably priced spectrum. 😃

Note that Bifrost intentionally avoids the South China Sea by routing itself via the Indonesian islands. This avoids Chinese permitting as the Chinese government claims sovereignty over the international waters of the South China Sea and has created artificial military output islands to enforce its claim. The circuitous routing reduces exposure to Chinese sabotage in case of a hot war as well avoiding the cable congested South China. It's a resiliency advantage. The design's tradeoff is higher latency, but more importantly higher cost. Much, but not all of Indonesian waters are shallow. So deep burial is an absolute necessity.

Google and META are joint leads on the other Singapore/US cable, Echo. Not surprisingly, ECHO also avoids the South China Sea by thread itself itself via Indonesia. The cable is a 144 Tbps system. I expect Google and META to keep most of the cable capacity for themselves with Amazon siphoning off a bit as US landing partner.

So for the moment there is no real relief to the high capacity pricing and dependence on Tokyo for reaching the US. The solution is a large carrier consortium cable, but the American Tech Giants represent 80% of demand on this route and they have their own supply. They built it. Moreover, large carrier consortiums work best when a route has lots of intermediate add/drop points like SWM5 or AAE1. It distributes construction cost among many players and raises total traffic flow on the cable. Without hyperscaler traffic, a carrier project is probably not justifiable.

Map of the Fibre Optic Subsea Echo Cable

Map of Fibre Optic Subsea Bifrost Cable

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