Market Forecast: Submarine Cable Fleet
By Alan Mauldin
As international bandwidth demand continues to surge, the need for net new submarine cables often makes the headlines. But cable capacity isn’t the only issue: There are looming capacity issues with the international cable maintenance vessel fleet and whether it will be able to sustain current service levels as the cable ecosystem expands.
A projected 48 percent net increase in total cable kilometers are estimated to be deployed in the world’s oceans by 2040, driven by rising bandwidth demands and the need for network redundancy and resilience. But by the same year, approximately 64 percent of cable maintenance vessels will have reached the end of their service life, with about half (47 percent) of the global fleet of cable ships also approaching this milestone. These trends will significantly impact the marine maintenance sector—influencing repair vessel demand and utilization—and raise important considerations regarding the long-term sustainability of maintenance agreements and the efficacy of existing operational structures.
We now have data and analysis to shed light on the future challenges for the marine maintenance sector and the compounding results of decades of underinvestment in maintaining this infrastructure—a stark contrast to sizable investments made in the infrastructure itself. Mike Constable of Infra-Analytics, my TeleGeography colleague Lane Burdette, and I have been studying these issues to create a common, data-based reference for industry stakeholders to understand and address the challenges for the security and resilience of submarine digital infrastructure.
Our new report, “The Future of Submarine Cable Maintenance: Trends, Challenges, and Strategies,” details what is needed to sustain current service levels and reduce repair delays for the undersea cables that carry global internet traffic. We analyzed data sets relating to the maintenance vessel fleet and cable investment projections to forecast how the anticipated increase of new cable kilometers and corresponding cable faults may influence the demand for repair vessels. Our analysis also considers the context of the evolving regulatory and geopolitical macroenvironment that will continue to shape the submarine cable ecosystem.
The data show the global submarine cable fleet’s inadequacy to take on the challenges ahead. The fleet includes purpose-built vessels or vessels converted from those produced for the oil and gas industry. The service life of purpose-built vessels is around 40 years, with conversion vessels topping out at a maximum of 35 years.
The current global fleet is composed of roughly 60 percent purpose-built vessels, and 80 percent of them were commissioned more than two decades ago. Data analysis of the fleet engaged in contracted and ad hoc maintenance shows that, currently, six vessels (12 percent) have surpassed a 40-year service life, and within the next decade, an additional six vessels, representing 26 percent of the maintenance fleet, are poised to reach the 40-year threshold.
So where do we go from here? Meeting the challenges of the rapidly expanding submarine cable ecosystem and an aging cable ship fleet will require an investment of roughly $3 billion to sustain current service levels and avoid repair delays. This would entail the acquisition of 15 replacement ships and five additional ships to serve the global subsea internet infrastructure. The vast majority (13) of replacement vessels will be needed from 2026 to 2035.
The majority of new vessels will be needed in Asia, where eight of these replacement vessels will be required by 2040, with the additional five new ships needing to be deployed in the region. These forecasts only assume refreshing the existing fleet on a one-to-one basis, while retaining their current home port locations.
The coming years are critical for cable maintenance. Up until now, high capital costs, market uncertainty, and maintenance agreement economics have been factors behind the sporadic investment in new vessels and the prevailing trend to introduce used/secondhand vessels to the global maintenance fleet—but the future of marine maintenance can be different.
The sector’s success hinges on balancing commercial viability, operational efficiency, and the increasing demands for resilient, secure submarine cable infrastructure. We need substantial and timely investment in new maintenance vessels, and it also may be necessary to adjust commercial and operational models to enhance the efficacy of maintenance agreement structures, ensuring that adequate investment in new assets meets long-term service quality requirements.