Spain: the strategic location for the connection of submarine cables.
December 7th, 2022
Seventy percent of the data arriving in Europe passes through Spain. This is done by means of the submarine cables connections. The subsea cables cross the ocean, connecting regions all over the world.
Submarine cables connections enable the transmission of internet and data between continents. The connections of the device you are using to read this article are constantly being improved due to submarine cables. This happens because, by enabling internet transmission, submarine cables contribute to the development of the telecommunication network in your region that allows you to have a good internet connection.
Why Spain?
Spain is a strategic location for the connection of submarine cables. There are various reasons for this: it is surrounded by sea; it is the closest European point to Africa and Latin America; and it has a large number and quality of connections and large telecommunications nodes.
Spain is investing heavily in the development of submarine cable connectivity, and currently has 28 anchor points for these cables. In this way, it is positioned as an alternative to the UK in the transoceanic connection with Europe. In addition, it is presented as a more favorable option than the UK due to the overpopulation of submarine cables that the UK has and the consequences of this.
Projects
One of the most recent projects is Google’s Grace Hooper cable, which connects New York, Bilbao (Spain) and Bude (UK) and started this year. On the other hand, the A2Africa 2023 cable, which will link Barcelona and Tenerife with 30 African cities, will be put into operation in 2023. This 37,000-kilometer cable will have as clients: China Mobile, Meta, MTN Group, Orange, Saudi Telecom, Vodafone and WIOCC among others.
Subsea Cable Market
The submarine cables connection requires several services. Firstly, the cables need to be manufactured, secondly, there is the need for monitoring by ships, environmental assessments and the connection and installation of these telecommunications.
The submarine power cables market has a compound annual growth rate of close to 6% (expected between 2020 and 2025). However, we can see a greater increase in demand through the leading submarine cable manufacturing companies: France’s Nexans, Denmark’s NKT and Italy’s Prysmian. In 2020, Nexans shares increased in value by 105%, NKT by 102% and Prysmian by 39%, all above the 38% increase in the Eurostoxx50.
These companies manufactured other types of cable apart from high-voltage submarine cable. However, due to the sharp increase in demand for this type of cable, they had to restructure in order to be able to meet it. For its part, Nexans forecasts a 700% increase in the demand for high-voltage submarine cable over the next 10 years and NKT forecasts annual organic growth of 20%.
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