landing

Landing a submarine cable is no small task (Source: SPIN presentation)

An Up-to-date primer on the state of submarine cable projects in the Pacific Region is titled Trans-Pacific Capacity: Possible New Price War? It includes a section that heavily references the South Pacific:

The latest construction wave began in 2006 and has been centered on the Asian and Pacific Regions. The current round of activity started with the Gondwana, Australia to New Caledonia system,Telstra’s Australia to Hawaii system and six new trans-Pacific cables. These new cables are the Trans Pacific Express, Asia American Gateway, FLAG’s Eagle, Next Generation Network, and the Unity cable projects (Source: TMC).

Out of these six projects, only one faces significant delay:

TPE is in service, AAG is nearing completion, Unity has been surveyed and will be installed in 2009, while only  the FLAG Eagle system has been postponed, says Graham Evans, EGS Survey Group business development director, reported by Submarine Telecoms Forum (Source: TMC).

This causes leading industry figures like Bill Barney, CEO of PacNet to change long-held beliefs that the increased supply and competition will not put downward pressure on pricing for backhaul service.

It is against this backdrop, we have to assess infrastructure efforts from O3b Networks and SPIN SA.  We hang in the balance as they convince their investors that the returns justify the comittment of capital.  These same investors are already skitterish about such large price tags and might be even more so when they hear what Bill Barney has to say.

Dionisia’s article in this month’s Islands Business was also very detailed on identifying targets met by the SPIN Cable project:

... SPIN SA launched an international open tender in June 2008 for the supply and delivery of the SPIN submarine cable system. Three international suppliers replied positively and submitted a comprehensive proposal. In November 2008, SPIN SA organised the tender clarifications and met with the three vendors in Paris. The agenda is to negotiate and sign the supplier contract in the first quarter on 2009, with the tentative implementation of the system in the second half of 2010.”  (Source: Islands Business)

According to a company presentation (Download PDF here, 1MB), the SPIN project is an attempt to build upon new cable deployments in the  Pacific region. The Sydney-Noumea cable (Gondwana) is functioning and the Honolulu-Papeete  cable (Honotua) is expected to proceed without delay. SPIN is an attempt to leverage these developments to build the segment connecting New Caledonia to French Polynesia:

Outline of SPIN

Who will opt to be a part of SPIN?

As of July 2008, project partners include New Caledonia, Wallis and Futuna,  American Samoa, Niue, and French Polynesia. A previous post, contains a World Bank proposal outlining what a cost-sharing structure could look like with wider participation from other Pacific nations.

Part of the reason, why there is very little information out there is because this underpinning layer of the Internet is one that is only of interest to the operators of these networks and their investors–both acting out of self-interest to keep project details out of the limelight. So, while they do their mating dance, we in the region will have to wait and see how commitments from governments and telecom operators alter the shape of the project.

It is no coincidence that both O3b Networks and SPIN say they will be online by the second half of 2010. To challenge the status quo of terrible Internet service in the region and move past the era of high-margin and low-demand, one or both of these projects will have to deliver on their promises.

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