Net capacity down to wire
Australia's submarine fibre-optic links to the world may not be fully utilised at the moment, but more are being built to cater to our insatiable appetite for data and content.
The online feast - shown recently by Bureau of Statistics data revealing record downloads in the last three months of 2012 - has helped triple the total capacity of our submarine cable links since 2008 and is expected to continue to grow rapidly, according to market researcher TeleGeography.
In 2008, Australia's lit capacity - or the actual traffic-carrying ability of the system - on all its submarine cable connections was 1.2 terabytes a second. It rose to 3.4 terabytes in 2012. Most of Australia's international internet traffic travels over five cables: Southern Cross Cable Network, Australia-Japan Cable, Telstra's Endeavour, Pipe Network's PPC-1 and SeaMeWe-3.
While its capacity is dwarfed by other regions - the trans-Atlantic region had 19.2 terabytes a second in 2012, intra-Asia 14.4 terabytes and trans-Pacific 13.5 terabytes - TeleGeography analyst Alan Mauldin expects existing cables to be upgraded and joined by new links. "For instance, Southern Cross will be upgraded in a few months to have 2.6 terabytes per second of capacity in service but has the potential to be over 12 terabytes," he said.
"Even with a large amount of potential capacity on existing cables, new cables can still be viable, particularly ones that would improve network resilience - such as a new cable on the west coast of Australia up to Singapore. This route is only served by one older system."
Although a new cable plan by Pacific Fibre recently collapsed, there have been several announcements of other ventures including the Tasman Global Access cable proposed by Telstra, Vodafone and TNZI, the Australia Singapore Cable by Leighton Group and the APX-West by SubPartners.
"There have been various plans for a new west coast cable for over a decade, and it seems likely that at least one of these will be built," Mauldin says. "There does seem be room for another cable from Australia/NZ to the United States as well."
The Hawaiki Submarine Cable, connecting Australia, New Zealand, Hawaii and the US west coast by 2015, is also on the cards. But while TeleGeography notes plenty of unused potential capacity, Hawaiki's chief operating officer, Ludovic Hutier, expects capacity issues as traffic growth is about 50 per cent a year. He forecasts a capacity requirement of 28 terabytes a second by 2019.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free