Key Observations
- Lots of Faster cable capacity available. Third fastest Japan/US sysrem. TY4/1 Wilshire or CLS/DC combinations available. Figure $13.5 MRC to $17.5K MRC depending on exact end points on a 1 year contract.
- Chinese carriers dominate AAE1 and they report no capacity left. Other Asian carriers were reselling Chinese capacity. Hence their cupboards are now bare as well. Only 10G capacity available.
- SMW5 is also almost fully depleted. At this point it is a so-called ‘diversity play’ for AAE1. Despite the tight Red Sea lane fit and the fact that Egypt is single point of failure.
- Peace cable is not ready til 1Q2025, but pricing is available and orders are being taken. One SVP of sales told me that Peace will put downward pressure on the Marseille/Singapore route. I do think that will happen, but not by itself. It is Peace plus SWM6 that will temporarily lower prices. Temporary because AAE1 and SWM5 are depleted, but demand is steadily growing. No end to the demand tsunami.
- TransAtlantic pricing has narrowed to the $4000 to $5,500 per month range for 100G wavelengths on 2 or 3 year contracts. Market has probably bottomed out. I expect to see market consolidation fairly soon. EXA or some other party is likely to do the consolidating.
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