Sprint's Transatlantic 40G Changes the Game

November 24th, 2008 by · Leave a Comment

On Friday, Sprint Nextel (NYSE:S, news, filings) announced that they have successfully implemented a 40G transatlantic IP connection between New York and Sweden.  That's 40Gbps over a single wavelength on an existing submarine cable system, in this case over TAT-14 from SeaGirt, NJ to Blajberg, Denmark, not 4x10G or anything similar.  The link was established using Cisco's CRS-1 and IP over DWDM systems, not with traditional external DWDM equipment.  While still just a trial, this may herald substantial shifts in the transatlantic bandwidth market.

Back in the bubble, overbuilding led to a collapse in transatlantic pricing, but over the last few years the market has stabilized.  Bandwidth requirements have filled up (or nearly so) all slightly earlier cables such as TAT-14 and AC-2/Yellow, leaving further bandwidth sales to the four newest systems, most of which changed hands after the bubble burst.  Those are

  • Hibernia Atlantic, which emerged from 360Networks and is upgradeable to 1.92Gbps,
  • Apollo, a joint venture of Cable & Wireless and Alcatel-Lucent, upgradeable to 2.3Tbps
  • Reliance Flag, which tops out at 2.4Tbps (I think)
  • VSNL Translatlantic, owned by Tata via the Tyco Global Network upgradeable to 5.12Tbps

[please do correct me if I have anything wrong]

Companies like Level 3 have been buying capacity from these four because their own systems are full and cannot be upgraded competitively.   If commercially viable, this new method raises TAT-14's theoretical bandwidth from a mostly full 640Gbps to a mostly empty 2.56Tbps.  Of course, that means that the theoretical maximum for the four largest systems go up to the 5-20Tbps range, but the point is that for those who need more transatlantic bandwidth there may suddenly be more alternatives in the short to medium terms.

The next move though is likely to come from rival submarine 40G implementations, does Alcatel-Lucent (NYSE:ALU, news, filings) have a response in the works?  Or are they too still too busy downsizing to care, given that their Apollo cable isn't full just yet? And might Level 3 Communications (NYSE:LVLT, news, filings) or glbc decide to upgrade their parts of the AC-2/Yellow systems?

But Hibernia Atlantic, as the only pure transatlantic cable in the group and also the smallest, seems the likeliest operator to respond.  Hibernia already operates 40G natively on its short undersea hop from Boston to Halifax using Huawei gear, but hasn't put it on the transatlantic route itself yet.   With both Huawei and Hibernia lighter on their feet than most, I'll bet they move next.

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Categories: Fiber optic cable · Old · Polls · Telecom Equipment · Undersea cables

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