the undersea cable business

Filed in archive Technology on May 10, 2004

This NYT article has good insights on business laying cables undersea. It was once believed that this business would supply strong margins as the internet grows, alas the industry went into disaster:

"Nearly every company that strings fiber optics across oceans has been restructured or has gone bankrupt. Lease prices for cable lines have collapsed and are still falling. Bankers pulled the plug on most new projects long ago because so much cable was already sitting at the bottom of the ocean."

I knew technology made usage of cables much more efficient, but I did not realize that it is so bad.

"As it is, 11 percent of available undersea bandwidth globally is being used. With so much unused capacity, prices on leased lines across the Atlantic fell about 25 percent last year even as demand doubled, said Alan Mauldin, an analyst at the research firm Telegeography. There is so much unused bandwidth worldwide, he said, that three-quarters of all network operators would have to leave the market before prices stabilized."