Submarine Networks Industry Challenges

Alcatel Submarine Networks - Confidential 1

Paul Gabla

27th May 2021

Submarine NetworksIndustry Challenges

Alcatel Submarine Networks - Confidential 2Alcatel Submarine Networks - Confidential 2

Market trends for submarine cable networks

1.2 million km optical cables in service

Submarine cables transport 99% of Internet trafficCables Satellites

> 300Tb/s > 300Gb/s

Transport Access

25 years 10 years

Strong growth fueled by online apps, cloud computing, streaming, VR/AR, 5G …

OTTs are building networks for themselves, not for resale

Market growing from 2bn in 2016 to 4bn in 2024

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$bn

2.0 2.0 2.3 2.3

3.93.4 3.5 3.6 3.7 3.8

0.3 0.30.3 0.4

0.40.4 0.4 0.4 0.4 0.4

0

1

2

3

4

5

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Market for submarine systems – solid growth

2.3 2.32.6 2.7

4.33.8 3.9 4.0 4.1 4.2

2Africa

Telecom systemsServices

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Route Planning Marine Survey Permits Design

Manufacturing Marine Lay Support & MaintenanceInstallation & Commissioning

What does full turnkey supply mean ?

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Dry plantWet plant

Area coveredby ASN

The submarine network

Cable Repeaters Marine Operations Terminal Testing PM20% 15% 35% 10% 10% 10%

Typical split of submarine network construction costs

A complex integrated system, with high performance and reliability expectations

Cablestation

Data Center / POP

Terrestrial network

Data Center / POP

Terrestrial network

CableLandingStation

Survey, Lay, Maintain CableLanding Station

Back-hauling

Back-hauling

Branching UnitsR-OADM

Wet repeater amplifiersSLTE Power Feed

Equipment Cable SLTEPower Feed Equipment

Dry repeater

Dry repeater

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• Evolution of cost per km

• Over the same period, system capacity has multiplied by more than 1000

Technology developments (1/2) – cost of capacity

Construction cost 2000 2020

Transatlantic system (6500km) 250 M$ 125 M$

Transpacific system (10000km) 500 M$ 250 M$ - 50%

Over 20 years, the cost per bit/s per kmhas been dramatically reduced

by a factor of > 2000

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And soon…

From 1990 to 2020, submarine system

capacity multiplied by160,000

2019 2020 2022 20232021 2024+

350Tb/s 700Tb/s500Tb/s 1Pb/s

1

10

100

1

10

100

1

Gb/

sTb

/sPb

/s2.5G

10G100G

1T

1990 2000 2010 2020

channel cardWDM

SDM

X00G

per fibre

per cable

560MElectronics

SDM2.1 SDM2.2 SDM2.3

Technology developments (2/2) – system capacity

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650,000kmOf optical cables deployed

Leading-edge and reliable optical technologyHigh capacity Networking flexibility25-years long-term support

50,000km per year The largest manufacturing capabilityin the industry

ASN technical and industrial capability

Comprehensive portfolioTelecom systemsOil & GasDefense & Security

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The submarine networks industry DNA

Reliability

Innovation

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Market and industry challenges

Green and climate change

awareness

Keeping up withthe technical race

Market growthsustainability ?

Supplier industry must scale up

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think ahead,trust ASN.