In the evolving world of technology, Over-the-Top (OTT) services are often synonymous with giants like AWS, Microsoft, Google, Alibaba, and Tencent. However, OTT is much broader, referring to content, services, or applications delivered directly over the internet, bypassing traditional distribution methods such as cable. OTT services have revolutionized how users consume content, offering on-demand access across devices like smartphones, tablets, smart TVs, and computers. With global internet connectivity improvements, demand for OTT services has surged, driving a critical need for seamless global connectivity, particularly for the cloud services that underpin many of these platforms.
Submarine Cables: The “Oxygen” of Global Connectivity
To meet the demands of OTT and cloud services, global players have invested strategically in infrastructure to ensure high-speed, reliable connectivity. A vital yet often overlooked component of this infrastructure is undersea submarine cables, which carry the vast majority of global data transmission.
1. Global Network Infrastructure:
Submarine cables form the backbone of global connectivity, enabling cloud providers to meet growing demands for storage, computing, and content delivery services while ensuring high-performance connections worldwide.
2. Data Center Interconnection:
Submarine cables interconnect global networks of data centers, facilitating efficient data transfer and ensuring responsive, accessible services across regions.
3. Enhanced Reliability:
Compared to terrestrial or satellite networks, submarine cables offer unparalleled reliability and stability, essential for cloud-based service performance.
4. Enterprise Connectivity:
Enterprises adopting cloud services depend on submarine cables for secure communication between on-premises systems and cloud environments, ensuring seamless integration and operation.
Rising Connectivity Demands
Global data usage is growing exponentially. Telegeography (2023) projects annual growth of 32-38% for international bandwidth and 26-37% for internet bandwidth from 2023 to 2027. Today, 99% of global internet and data traffic travels through submarine cables, emphasizing their crucial role in powering global connectivity and supporting digital transformation.
A Catalyst for Digital Transformation
The proliferation of submarine cables enhances internet stability and capacity, enabling businesses to thrive in an interconnected world. As more cables are deployed, the robustness of global internet infrastructure increases, supporting innovative technologies and driving digital transformation across industries.
In China, where cross-border connectivity is essential for multinational enterprises and cloud providers, submarine cables are pivotal. They ensure businesses maintain reliable, secure connections to support operations and deliver high-quality services globally.
The Global Surge in Cloud Computing and China’s Role
The explosive growth of cloud computing globally has created an unparalleled demand for data capacity, leading to substantial investments in submarine cable projects. However, despite these investments, regions like Asia are grappling with a capacity shortfall caused by delays1 in several critical cable projects, including ADC, SJC2, and SMW6. These delays stem from a combination of geopolitical tensions, regulatory compliance hurdles, and challenges related to cable landing rights. Worsening the situation is the recent retirement of SMW3, one of the longest and most historically significant submarine cables, on 2th December 2024.
In response to these challenges, a new wave of submarine cable projects2, including VTS, ALC, Echo, Apricot, and Bifrost, is being developed to bridge the connectivity gap. These cables aim to connect key Asian cities, such as Tokyo, Singapore, and Manila, with major hubs in the United States, creating new pathways for data transmission. By diversifying routes and increasing capacity, these projects are expected to alleviate pressure on existing networks, reduce latency, and enhance the resilience of cross-border communications.
China’s unique connectivity landscape, often referred to as “China to Global” (C2G) or “Global to China” (G2C), plays a pivotal role in this growth. Anticipated new submarine cables with landing points in Hong Kong and links to global networks are expected to catalyse data transfer between ASEAN nations and China. This expansion highlights the indispensable role submarine cables play in facilitating cross-border connectivity and supporting the ever-increasing demand for cloud computing.
Cross-Border Challenges and Capacity Growth
Gartner and IDC forecast annual capacity growth in the range of 36-40% for China, driven by the increasing reliance on cloud services. However, cross-border connectivity in China presents significant complexity. A limited number of authorized providers are permitted to manage cross-border capacity, necessitating strict regulatory compliance and reporting.
While cable landing rights remain restricted to a few incumbents, collaboration with the authorities can enable other ISPs to offer similar services under established policies. In recent years, more cost-effective alternatives have emerged, along with diverse routes for connectivity beyond traditional paths like via Hong Kong. For example, route from Beijing to Europe or Shanghai to Japan provide viable options. Successfully navigating these challenges requires deep expertise and a great understanding of the regulatory landscape.
The interplay of cloud computing, submarine cables, and regulatory requirements will significantly shape the future of cross-border communication between China and the global network, influencing the region’s digital transformation trajectory.
Key Attributes of a Network Service Partner in China
While submarine cables are essential, achieving seamless connectivity and success in the Chinese market requires selecting the right network service partner. A skilled partner must possess the following attributes:
1. Strategic Points of Presence (POP):
A forward-thinking partner establishes POPs across China for extensive coverage, ensuring reliable last-mile access.
2. Congestion-Free Backbone:
A robust backbone ensures efficient data transfer, vital for international business operations.
3. Regulatory Expertise:
Navigating China’s complex regulations requires a partner proficient in compliance, reporting, and aligning operations with local laws.
4. Scalability and Agility:
The ability to adapt to evolving connectivity needs and technological advancements is crucial for a reliable partner.
Understanding Asia’s submarine cable landscape and China’s unique connectivity requirements is essential for businesses aiming to thrive in the region. By leveraging new submarine cable developments and partnering with a network service provider that combines technological expertise, regulatory insight, and strategic foresight, enterprises can build a resilient foundation for growth.
CBC Tech emerges as a strong partner in this landscape, offering unparalleled expertise in cross-border connectivity, regulatory navigation, and infrastructure solutions. CBC Tech enables businesses to unlock their potential in one of the world’s most dynamic and influential markets.
1 https://www.capacitymedia.com/article/2c4dk33k0lcfof7m3ku0w/news/12-of-asias-most-important-submarine-cable-projects
2 https://submarinenetworks.com/en/systems/asia-australia/smw3/smw3-retire
