Connec'ng the Future Development Trends in Submarine Systems
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1 Connec'ng the Future Development Trends in Submarine Systems Mike Constable Chief Execu4ve Huawei Marine Networks
2 Market Evolution What Does It Mean How HMN are Responding 2
3 How Connected Are We? TOTAL POPULATION INTERNET USERS ACTIVE SOCIAL MEDIA USERS UNIQUE MOBILE USERS Billion Billion Billion Billion URBANISATION 54% PENETRATION 51% PENETRATION 40% PENETRATION 67% 99% of interna'onal connec'vity is facilitated by submarine cables 3
4 Drive to Digital Economic Prosperity Adequate low-cost internabonal bandwidth Digital Economic Prosperity Data centre infrastructure and services Govt., Business and Cloud Services & Individual Adop'on Applica'ons Diverse submarine network infrastructure Broadband penetrabon & internet usage Submarine Connec'vity Broadband Penetra'on (Terrestrial Connec'vity) Data Centre Infrastructure Digital Content Government ICT Policy and Regulatory Environment In APAC, only Singapore & Japan Rank in top 10 NaBons for ICT Networked Readiness Source: World Economic Forum, Global Informa4on Technology Report
5 Mobile Broadband Evolu'on Growth of mobile-broadband subscriptions, CAGR, * Mobile-broadband subscriptions, 2017* World World Developed Developed Developing Developing LCD s LCD s % Per 100 inhabitants Source: ICT Facts and Figures, ITU
6 Broadband Distribu'on Map 1: Mobile Broadband Penetration, 2015 Proportion of total mobile subscriptions relating to mobile broadband, % Policy Ini'a'ves Figure 11: Policy Leadership in National Broadband Plans, Growth in National Broadband Plans, (top chart); Number of countries that have adopted a Plan or Strategy, planning to adopt or without (bottom chart) Source: ITU. Mobile Broadband PenetraBon 2015 Figure 6: Location of Global Mobile Broadband Subscriptions, Growth in NaBonal Broadband Plans Source: The State of Broadband, ITU
7 Data Centre Evolu'on & Impact TradiBonal DC Services Cloud Services Like submarine cables, data centres facilitate the digital economy of nabons Major players conbnue to decentralize data centre infrastructure to a regional level Services Offered Wholesale Co-locaBon Lease real estate Retail Co- LocaBon Lease of physical space, racks incl. connecbvity Infrastructure as a Service (IaaS) Leasing capacity incl. servers and storage Placorm as a Service (PaaS) Provide tools such as programming languages & data bases Sodware as a Service (SaaS) Deliver Cloud based ApplicaBons Global DC investment expected to reach $75B by 2021 Facebook Network Traffic Profile More than 90% of global data centre space is occupied by US companies Data centres are rapidly forming the nexus of the global submarine cable network topology 7
8 Data Centre Distribu'on Opportunities? Major Content Providers Data Centre LocaBons Source: TeleGeography
9 Interna'onal Bandwidth Flows In Asia Pacific, Hong Kong, China, Japan and Singapore are the regional hubs EUROPE CN KR JP Other nabons limited by internabonal bandwidth and submarine cable connecbvity IN MM LA VN TH KH MY SG HK TW PH UNITED STATES Country/Region Submarine cable connections Country/Region Submarine cable connections The China Mainland 12 Thailand 9 Japan 23 Vietnam 6 Hong Kong China 11 Sri Lanka 7 Singapore 24 Bangladesh 2 Malaysia 20 Cambodia 2 Philippines 13 Myanmar 3 ID Interna'onal Bandwidth Asia-Pacific Source: TeleGeography
10 Impact of New Applica'ons: VR and AI Bandwidth requirements for new applica4ons are uncertain Pokémon Go s Impact on Google s Cloud Placorm 10
11 Market Evolution What Does It Mean How HMN are Responding 11
12 High-speed, Large Capacity Transmission Networks I Data Center Capacity II. Cloud Service Drive Enable III. New ICT Hub 5G Cloud IoT Big Data Data Center 4K Video 12
13 Used Capacity & Demand However Price erosion conbnues But, intra-asia capacity prices remain high Monthly rental fee for private line is between 3x to 30x that of Asia US or Asia Europe Content providers now consume 40% of intra-asia traffic Asia-Pacific Used InternaBonal Bandwidth Growth Source: TeleGeography 2017 Global lit capacity exceeds 3,500 Tb/s 13
14 What Does This Mean for Submarine Cables Demand is strong Construction Costs (USD Billion)! $3.0! $2.5! $2.0! $1.5! $1.0! $0.5! $0.0! 2.1! Actual 1.7! 1.1! 1.6! 2.3! Forecast ! 1.8! Annual Investment Value Source: TeleGeography 2017 Humans are playing a diminished role in generabng bandwidth The global network topology is moving to a Data Centre centric, network topology 14
15 Market Evolution What Does It Mean How HMN are Responding 15
16 Project Finance Solu'ons 11% USD 100 Million 13% 11% 11% 11% 12% 39% 8% 8% Private 50% Consortia Development Banks FINANCING OF PLANNED CABLES: Customer Finance for Sales share of sales HUAWEI PROJECT FINANCE SOLUTIONS Source: SubTel Forum
17 Technology Road Map Unified Placorm provides seamless terrestrial & submarine network management New high-power 8+ fibre pair repeater Expand cable manufacturing capacity with new lowcost cable designs TransOceanic Channel 37.5GHz System upgrades; maximises return on investment Bit Rate ROADM (WSS) BU; agile, scalable networks Technology Advanced system design capacity 24Tb+ per fibre pair OSN Tb 4Tb C band 80λ 24Tb 50Tb 100Tb C band 100λ C & C+ 120λ C+L band 240λ 100/150 Gb/s 200Gb/s 400Gb/s 50Gb/s BPSK /QPSK Coherent FEC Available PDM-QPSK,PDM-8QAM/16QAM FEC Nyquist spectral shaping Nonlinearity & Dispersion comp. PCS-32QAM/ PCS-64QAM Lower FEC limit Advanced comp. tech. Planned 17
18 Huawei Marine s Contribu'on Contracted Route KM(cumulative value) Upgrade Projects(cumulative value) > 50,000 km new build cables contracted 47 Upgrade projects contracted Huawei Marine has undertaken 90 submarine cable projects; serving 68 countries globally 18
19 Summary Submarine cables are a fundamental, key enabler that transforms a nabon s internabonal and domesbc connecbvity Numerous opportunibes exist within Asia-Pac, to accelerate the transformabon of the ICT revolubon Investment in data centres & high-speed, large capacity submarine cable infrastructure, is cribcal to maximise the economic benefits of the digital economy. Within Asia, further investment is required. The global submarine cable network topology is rapidly transforming into a data centre centric topology as content providers shape capacity demand paserns This is driving the requirement for agile, flexible, larger-capacity submarine cable systems Huawei Marine conbnues to respond to the evolving market by developing advanced technologies to bring low-cost, robust submarine cable networks 19
20 Thank You. Copyright 2018 Huawei Technologies Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.
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