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The Economic Impact of Submarine Cable Outages Can Still be Enormous
Submarine Cable NewsFeed - Market Snapshot
Monday, 21 August 2017 12:21

There have been a number of submarine fiber optic cable outages recently.  Most reportedly have caused at most only limited disruptions in the areas they serve; the impact mitigated by having adequate diversity and disaster recovery plans to re-route traffic to other cables.  But there are still events that remind us how devastating even a brief outage can be to an Internet-dependent economy.

Somalia was connected to the global submarine cable network in 2013.  Even so, a result of 20 years of internal conflict that devastated the country’s infrastructure, Internet usage remains low.  But when Somalia’s only cable was cut by a ship’s anchor in June, the results were dramatic.  For nearly three weeks, Somalia had virtually no Internet access.  While end users were annoyed and inconvenienced, we were reminded of the economic cost potential of an outage when Somali Post and Telecommunications Minister Abdi Anshur Hassan called it a “major disaster."  The BBC reported that the impact of the outage amounted to more than US$130 million.  To put that number in perspective, Somalia’s GDP in 2016 was only US$6.22 billion. 

Recently, Pakistan suffered a disruption of about 38 hours due to faults on two of the six international submarine cables serving the country.  While the efforts of the telecom authorities in Pakistan limited the duration of the disruption by moving traffic to other cables, several airline flights had to be cancelled and the cost to the Pakistani economy was put at US$10 million. 

Coincidentally, Pakistan’s telecom regulator, the Pakistan Telecommunications Authority (PTA), had only days before released a consultation document on new licenses for Long Distance & International (LDI) operators.  The document lamented the failure of previous licensing efforts to add enough new cables to meet the ever increasing demand of data services and to provide redundancy and provision of cross-country connectivity to neighboring countries.”  The document calls for new LDI licensees to be required to build, either on their own or in a consortium, a new international submarine cable within 10 years of the receipt of the license.