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Trade-off Study of a New Build versus Upgraded Existing Undersea Optic Fibre Cable System
A Dissertation Submitted in Partial Fulfilment of the Degree of
MAGISTER INGENERIAE
in
ENGINEERING MANAGEMENT
at the
FACULTY OF ENGINEERING AND THE BUILT ENVIRONMENT
of the
UNIVERSITY of JOHANNESBURG
By
Kgomotso Peter Manyapetsa
2015
SUPERVISOR: Dr A. WESSELS
Acknowledgements
I wish to thank the following persons who provided valuable advice and assistance on the compilation of this dissertation:
Mr Tebogo Molobeng – for provisioning and guidance about the procurement and implementation of undersea fibre cable systems given your wealth of experience in the industry,
Mr Mongezi Nonkomo - for advice during the proposal drafting phase and advice on operations and maintenance of undersea optic fibre cable systems and general advice on how the industry functions,
Mr Ralph Vraagom – for persistently encouraging me to start the master’s program,
Ms Lerato Holoane- for the encouragement and patience throughout the masters phase,
Mr Vinny Motjoadi- inspiration and motivation during dire times, as well as guidance on dissertation drafting, and
Supervisors Prof JH Pretorius and Dr. A Wessels for the supervision and recommendations during the research proceedings.
I
Abstract
Undersea optic fibre cable systems are an integral part of the international telecommunications infrastructure for supporting growing marketplace bandwidth needs and they have become a critical component to the constantly evolving Internet traffic content. The issue associated with existing undersea optic fibre cable systems is the scalability of the capacity in meeting and anticipating future capacity demands of the network. In order to meet increased traffic demands, telecoms companies are required to build new systems or upgrade the existing ones in order to address this issue of increased capacity demand. Building an undersea optic fibre cable system is an expensive venture, so much so that the system owners are reluctant to invest in newer optic fibre cable system whilst they have ownership on existing systems. They seek ways in which to optimise the existing system in order to extend the economic lifespan of the system.
The research sought to demonstrate how effective it is to upgrade the existing undersea optic fibre cable systems given the technological advancements, expenditures as opposed to constructing a new undersea optic fibre cable system through a trade-off study of a new build versus upgraded existing undersea optic fibre cable system activities.
It was found that upgrading an existing system to a capacity beyond the original design capacity was achievable through the enablers such as Wavelength Division Multiplex, spectral efficiency, coherent detection, modulation formats and forward error correction techniques. It was found that only the terminal station equipment gets altered whilst the submerged plant remains unchanged, making it possible to optimise the capacity on the existing undersea optic fibre system effectively in a timeous period and enable the exploitation of the increased traffic demand. Whereas to construct a new optic fibre cable system requires huge capital investments and time to implement the system can take a minimum of 24 months without delays, however delays are part and parcel of system construction, delays ranging from obtaining permits, equipment/material delivery, construction of both the submerged and dry plants.
II
Table of contents
Acknowledgements ...... I Abstract ...... II Table of contents ...... III List of Figures ...... V List of Tables ...... VI Abbreviations ...... VII Glossary ...... VIII Chapter 1: Introduction ...... 1 1.1. Background ...... 1 1.2. Research Rationale ...... 2 1.3. The Problem Statement ...... 4 1.4. Research Objectives and Questions ...... 5 1.5. Significance of the research ...... 6 1.6. Research delimitations ...... 6 1.7. Report layout ...... 7 Chapter 2: Literature Review: undersea fibre optic cable system composition ...... 9 2.1. Submerged Plant ...... 9 2.1.1. Undersea Optic fibre cable ...... 9 2.1.2. Repeaters ...... 10 2.1.3. Equalisers ...... 11 2.1.4. Branching units ...... 11 2.2. Dry Plant ...... 11 2.2.1. Power Feeding Equipment (PFE) ...... 12 2.3. Network Management System (NMS) ...... 15 2.4. Undersea optic fibre cable System Integration ...... 16 2.4.1. Power Feeding Equipment System powering layout ...... 17 2.4.2. Submarine Line Terminating Equipment layout ...... 17 2.4.3. Cable Landing Station Equipment Connectivity ...... 18 2.5. Reliability and Availability ...... 19 2.5.1. Failure rate analysis of the undersea fibre optic cable ...... 19 2.5.2. Submerged plant reliability...... 20
III
2.6. The development and implementation of an undersea optic fibre cable system ...... 21 2.6.1. The Life cycle phases of an undersea fibre optic cable system ...... 22 2.6.2. Phase I: Conceptual/ Planning ...... 22 2.6.2.1. Feasibility studies ...... 22 2.6.2.2. Financing a New undersea optic fibre Cable ...... 23 2.6.2.3. Business case development ...... 24 2.6.3. Phase II: Development ...... 25 2.6.3.1. Construction and maintenance agreement (C&MA) ...... 26 2.6.3.2. Procurement Group activities ...... 28 2.6.3.2.1. Supply Contract documentation ...... 29 2.6.3.2.2. Landing party agreements ...... 30 2.6.3.2.3. Desk Top Study and Marine Route survey...... 31 2.6.3.2.3.1. Desk Top Study ...... 31 2.6.3.2.3.2. Marine Route survey ...... 31 2.6.3.2.4. Permitting in undersea cable projects ...... 32 2.6.3.2.4.1. System supplier permits ...... 32 2.6.3.2.4.2. System Owner/Purchaser Permits ...... 33 2.6.3.2.4.3. Permitting risks and Mitigations ...... 33 2.6.4. Phase III: Implementation/Construction ...... 34 2.6.4.1. Commissioning and Acceptance ...... 35 2.6.4.1.1. Product design acceptance ...... 36 2.6.4.1.2. Factory acceptance testing ...... 36 2.6.4.1.3. Submerged plant assembly acceptance ...... 37 2.6.4.1.4. System loading and laying testing ...... 37 2.6.4.1.5. Site acceptance testing ...... 37 2.6.4.1.6. System end-to-end testing ...... 37 2.6.4.1.7. System confidence trial and provisional testing ...... 38 2.6.4.1.8. System final acceptance ...... 38 2.6.5. Phase IV: Close-out/Utilization ...... 39 2.6.6. Project timelines ...... 40 2.7. Upgrading Capacity of an existing undersea fibre optic cable ...... 42 2.7.1. Upgrade Capacity enablers ...... 43 2.7.2. Capacity Upgrade process ...... 45 2.7.3. Field trials ...... 47
IV
2.7.4. Simulations ...... 47 2.7.4.1. Actual network measurements ...... 48 2.7.4.2. Submerged plant age ...... 48 2.7.5. Guarantees of ultimate capacity ...... 48 2.7.6. Wet plant warrantees ...... 48 2.7.7. Operations and Maintenance ...... 49 2.7.8. Upgrade capital expenditure Cost ...... 49 2.7.9. Upgrading to 40 & 100 Gbps per wavelength/channel ...... 50 2.8. Summary ...... 50 Chapter 3: Research Methodology ...... 51 Chapter 4: Research Findings and Discussions ...... 58 4.1. Introduction ...... 58 4.2. Findings and interpretation ...... 58 4.2.1. Section A: Background Information ...... 58 4.2.2. Section B: Undersea Cable New built questions ...... 59 4.2.3. Section C: Upgrade Questions ...... 73 4.3. Research questions answers ...... 81 4.4. Summary of the results ...... 91 Chapter 5: Conclusions and recommendations ...... 92 References ...... 95 Appendix A: Cable systems ...... 99 Appendix B: Email Body ...... 101 Appendix C: Questionnaire ...... 102 Appendix D: Questionnaire responses ...... 113
List of Figures Figure 1: overview of undersea optic fibre cable system ...... 2 Figure 2: The Investment in Sub-Saharan African undersea cable Systems (Submarine telecoms Forum, Terabit consulting 2013) ...... 2 Figure 3: existing undersea fibre cable systems in Africa ...... 3 Figure 4: Sub-Saharan Bandwidth Capacity Growth (Submarine telecoms Forum, Terabit consulting 2013) ...... 3 Figure 5: number of upgraded undersea cable systems per year (Jarvis November, 2012) ...... 4 Figure 6: Types of undersea cables and a descriptive schematic of the LW cable (Yamamoto, Miyazaki 2004, Elsevier Inc, Libert, Waterworth 2002) ...... 10
V
Figure 7: Undersea Repeater with dimension length: 1500mm and diameter: 300mm (Hazell, Little 2002) ...... 10 Figure 8: Branching Unit, dimensions; diameter and length: 300mm and 1500mm(Hazell, Little 2002, Yamamoto, Miyazaki 2004, Elsevier Inc) ...... 11 Figure 9: Undersea fibre cable system configuration comprised of three terminal stations (Chesnoy, JERPAHAGNON 2002) ...... 12 Figure 10: Power Feed Equipment (Alcatel-lucent 2014) ...... 13 Figure 11: SLTE equipmen 1620 Light Manager(Alcatel-lucent 2014) ...... 14 Figure 12: SIE equipment 1678MCC (Alcatel-lucent 2014) ...... 14 Figure 13: Element Management System equipment (Suzuki 2002) ...... 16 Figure 14: Configuration of EMS ...... 16 Figure 15: PFE powering of trunk-and-branch layout ...... 17 Figure 16: SLTE connectivity between the stations layout ...... 18 Figure 17: Cable Landing Station Equipment Configuration ...... 19 Figure 18: bath tub curve of undersea fibre optic cable (Anslow 2010) ...... 20 Figure 19: Cash flow excursion during system economic life ...... 24 Figure 20: C&MA Organizational structure for Consortium based undersea cable system ...... 27 Figure 21: undersea cable system procurement process ...... 29 Figure 22: undersea cable procurement flow chart (Brask May 2006) ...... 35 Figure 23: Implementation process activities (Dhooper, Jingwei 2010)...... 39 Figure 24: System Supplier & Purchaser responsibilities ...... 42 Figure 25: Upgradability of existing systems with or without technological improvement ...... 45 Figure 26: addition of 40Gbps channels by removal of existing 10Gbps channels (Blondel 2013) ...... 46 Figure 27: Upgrade Implementation activities ...... 47 Figure 28 Data collection methods ...... 57 Figure 29 WACS cable system ...... 99 Figure 30 SAT3/WASC cable system ...... 99 Figure 31 EASSy cable system ...... 100 Figure 32 EIG cable system ...... 100
List of Tables Table 1: undersea cables and their sea depth ...... 10 Table 2: System requirements of an undersea fibre optic cable system (Stafford 2013) ...... 41 Table 3: Spectral Efficiencies of differing channel rates (Blondel 2013, Summers, Crochet et al. 2013) ...... 44 Table 4 Pros and cons ...... 55 Table 5 expected participants per cable system ...... 56
VI
Abbreviations
C&MA Construction and Maintenance Agreement
CAGR Compounded Annual Growth Rate
CAPEX Capital Expenditure
DWDM Dense Wavelength Division Multiplexer
FA Final Acceptance
ITT Invitation To Tender
MOU Memorandum Of Understanding
NMS Network Management System
PFE Power Feeding Equipment
RFPA Ready For Provisional Acceptance
Synchronous digital hierarchy Interface SIE Equipment
SLTE Submarine Line Terminating Equipment
VII
Glossary
Bit rate (channel The numbers of bits that are conveyed or processed per unit rate) of time e.g. 10Gbps, 40Gbps, 100Gbps are various transmission rates in terms of Gigabits per second. Cable landing station the building located close to the beach whereby the undersea cable terminates, used to equip terminal equipment (i.e. SLTE,PFE,NMS) Commissioning The testing activities that demonstrate that the system has been designed with adequate margins against impairments, ageing etc. to ensure that the error performance requirements will be met throughout the system design life. Compound Annual The per annum growth rate compounded year over year, Growth Rate (CAGR) usually used in the context of the volume of traffic demand
Dense Wavelength The fibre transmission technique which multiplexes Division Multiplexing combining and transmitting multiple signals simultaneously at ( DWDM) different wavelengths on the same fibre. The technology creates multiple virtual fibres, thus multiplying the capacity of the physical medium. Dry Plant The terminal equipment located in a Cable Station, which comprises all of the undersea system transmission equipment, management equipment, cabling, spares, test equipment, etc. for the System. Fibre pair Two individual fibre strands that are paired together for bi- directional communication. Forward Error A communications technique that can correct data corrupted Correction ( FEC) during transmission at the receiving end. Before transmission, the data are processed through an algorithm that adds extra bits for error correction. If the transmitted message is received in error, the correction bits are used to repair it. Network The maintenance equipment and software that monitors and Management System controls the complete System from a central location. (NMS)
VIII
Permits The large set of permissions required to construct, own and operate a cable network, including but not limited to permissions from local governments to land the cable in their territory, operational permits, environmental permits, rights of way, agreements with local fishermen, etc. Plan of Work (POW) The project schedule and/or construction timeline.
Power Feeding The Power Feeding Equipment is a very large, high-voltage Equipment (PFE) power supply, located in the cable station, which provides line current into the undersea cable. PFEs are located at each cable station (powering from one end of the cable to the other) of a repeatered network. The line current is used to power the lasers in the amplifiers in each undersea repeater. Qualification Qualification is the activity which is also part of the development process, to demonstrate to the satisfaction of the Purchaser, in accordance to the requirements of the Contract that a technology, a component, an assembly or a sub-system is able to comply with its performance and reliability specifications. Ready For RFPA is the commercial point in time when a cable is Provisioning accepted by the cable owners from the system supplier. It Acceptance (RFPA) follows complete testing of the network to assure it meets all owners’ requirements. At this time, the warranties commence, and a substantial payment is made to the supplier. Repeater The underwater equipment which is responsible for amplifying the optical signal traversing the cable network. Submarine Line Submarine Line Terminal Equipment consists of Terminal Equipment Transmission Terminal Equipment with multi-channel (SLTE) transmission capability for transmitting data to and from various cable landing stations
Synchronous Digital Synchronous Digital Hierarchy (SDH) is a set of standardized Hierarchy (SDH) protocols that transfer multiple digital bit streams over optical fibre using lasers or highly coherent light from light-emitting
IX
diodes (LEDs). Undersea Cable The cable specifically refers to the physical cable, composed of fibre, copper, steel, polyethylene etc. between repeaters, with protective armouring over the outside of the cable. Upgrade The addition of new wavelengths to a network by the provisioning of additional transponders (SLTE Equipment), which light more of the available transport capacity on the cable network and make it available to transport traffic. Wavelength Division A technology that uses multiple lasers and transmits several Multiplexing (WDM) wavelengths of light (lambdas) simultaneously over a single optical fibre. Each signal travels within its unique colour band, which is modulated by the data. Wet/Submerged All equipment of an undersea cable system that is installed Plant between Beach Manholes (e.g. cable, repeaters, couplers, branching units, equalizers, joints, etc.) of each termination point of a cable route.
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Chapter 1: Introduction
1.1. Background
Given the rising global demand for data, telecommunications companies around the world are motivated to add bandwidth capacity on international and intercontinental undersea optic fibre cable routes (Submarine telecoms Forum, Terabit consulting 2012). Over 95 per cent of overseas communications are carried by undersea optic fibre cables (Carter, Burnett et al. 2009), as the increased capacity and speed make these systems the preferred medium for transporting data across the world. Data and voice transfer over these systems is not only cheaper, but also quicker than via satellite. Demand for additional bandwidth has been noticeable in emerging markets in Africa, Asia, and the Middle East (Submarine telecoms Forum, Terabit consulting 2012). Telecommunications Companies have sought to keep pace with this growing demand by constructing new undersea optic fibre cable systems to connect points throughout the world. Construction of new undersea optic fibre cable systems can be hampered by the licensing and permitting processes and country-specific regulatory requirements that may stand as obstructions to the rapid deployment of new international undersea optic fibre cable systems (Ash 2014, Yamamoto, Miyazaki 2004, Elsevier Inc).
These undersea optic fibre cable systems are primarily built in anticipation of the traffic demand/growth and also due to the existing undersea optic fibre cable systems reaching their initially installed and/or maximum design capacity (and hence generating traffic bottlenecks within the cable system, hampering communications). The undersea optic fibre cable system is comprised of two parts namely: the wet/ submerged plant and the dry plant/cable landing station (Ash 2014, Yamamoto, Miyazaki 2004, Elsevier Inc).
The submerged plant is comprised of the following: the optical cable, repeaters, equalisers, and the branching units. The cable landing station is comprised of the Submarine Line Terminating Equipment (SLTE), Power Feeding Equipment (PFE), Synchronous digital hierarchy Interface Equipment (SIE), and the Network Management System (NMS) which make up the terminal equipment (Suzuki 2002, Yamamoto, Miyazaki 2004, Elsevier Inc, Mick 24 Oct 2013). The above elements will be explored further in the literature review section. As an illustration, the composition of the undersea optic fibre cable system is given in Figure 1.
1
Figure 1: overview of undersea optic fibre cable system
1.2. Research Rationale
According to the submarine telecoms Industry Report of 2013, Sub-Saharan Africa was the most inadequately served region in the world with regards to international undersea communication capacity prior to the year 2009 (Submarine telecoms Forum, Terabit consulting 2012, Submarine telecoms Forum, Terabit consulting 2013). However, in 2005, due to the adoption of mobile phone service throughout the continent there was an increase in bandwidth demand and as a result undersea optic fibre cable system suppliers focused on the potential market opportunities in Africa in order to respond to the lack of new investment in existing markets (Submarine telecoms Forum, Terabit consulting 2012). As an illustration, Figure 2 illustrates cable infrastructure investment in sub-Saharan Africa since 1993 – 2012, which indicates the investment trends.
Figure 2: The Investment in Sub-Saharan African undersea cable Systems (Submarine telecoms Forum, Terabit consulting
2013)
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From Figure 2, it is evident that there were undersea optic fibre cable systems infrastructure investments from 2009 –2012 with a total amount of approximately $3 Billion, the cables were: TEAMS, Seacom, EASSy, Glo-1, Main one, ACE and WACS along the Eastern and Western African coastlines. The list of existing undersea optic fibre cable system along the African coastlines is listed on Figure 3 below.
Ready For no Service Cable System Name 1 1993 SAT-2 2 2002 SAT-3/SAFE 3 2009 East Africa Marine System (TEAMS) 4 2009 Seacom 5 2010 Glo-1 6 2010 Main One 7 2012 Africa Coast to Europe (ACE) 8 2012 West Africa Cable System (WACS) East African Submarine Cable System 9 2010 (EASSy) Figure 3: existing undersea fibre cable systems in Africa
According to the submarine telecoms Industry Report of 2013, the new undersea optic fibre cable systems that where installed since six years ago has had an impact on Africa’s bandwidth consumption and is indicated on Figure 4 below whereby the Compounded Annual Growth Rate (CAGR) was 71% over the years (Submarine telecoms Forum, Terabit consulting 2012, Submarine telecoms Forum, Terabit consulting 2013).
Figure 4: Sub-Saharan Bandwidth Capacity Growth (Submarine telecoms Forum, Terabit consulting 2013)
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Given the data explosion rates in Sub-Saharan Africa and the World, and the rate at which the existing undersea optic fibre cable systems are reaching their initially installed capacities, the dissertation seeks to examine whether upgrading these existing undersea optic fibre cable systems’ capacity to a higher one can assist in meeting the increasing capacity requirements and to find if investing in upgrading an existing cable system is cost effective than a new build undersea optic fibre cable system. The rationale of the research is:
To establish the effectiveness of upgrading the existing undersea optic fibre cable systems which are either congested or near design capacity, as opposed to building new undersea optic fibre cables, To ascertain whether the initial ultimate design capacity of an existing undersea cable system can be extended beyond its initial design, To ascertain commercial benefits/drawbacks involved in upgrading existing undersea communication cable systems compared to new-built cable systems.
Since 2009, there has been an upward trend of upgrading existing undersea optic fibre cable systems; Figure 5 below indicates the overall global trend of upgraded systems, the years 2011 and 2012 have the same number (10 systems) of upgraded systems due to the capacity demand being relatively similar on both years.
Figure 5: number of upgraded undersea cable systems per year (Jarvis November, 2012)
1.3. The Problem Statement
Undersea optic fibre cable systems are an integral part of the international telecommunications infrastructure for supporting growing marketplace bandwidth needs. Undersea optic fibre cable systems have become a critical component to the constantly evolving Internet traffic content. The issue associated with existing
4
undersea optic fibre cable systems is the scalability of capacity in meeting and anticipating future capacity demands of the network.
To meet the requirements of increased traffic demand and congestions, telecommunication carriers are required to build new undersea optic fibre cable systems or upgrade the existing systems to substantially increase bandwidth capacity (Lavallee November, 2012, Nielsen November, 2013, Clesca, Dr. Fevrier November 2013) so that they can attain the increased demands. The introduction of Wavelength Division Multiplexing (WDM) technology into the undersea cable system market afforded a means for system expansion through capacity upgrades (Lavallee November, 2012, Nielsen November, 2013, Clesca, Dr. Fevrier November 2013). The continuous evolution of transmission technology has enabled telecommunication carriers to extend an undersea optic fibre cable system life by expanding the capacity of that system beyond its original design capacity.
Furthermore, system owners have invested heavily in the construction of undersea optic fibre cable systems, and hence they want a longer service life coupled with good expendability on the capacity (Lavallee November, 2012, Nielsen November, 2013, Clesca, Dr. Fevrier November 2013). The existing undersea optic fibre cable systems have a potential to be expanded in capacity beyond the design capacity given the evolution of transmission technology. These methods are proving to be very popular and cost effective in the submarine cable industry.
The research seeks to demonstrate how effective it is to upgrade the existing undersea optic fibre cable systems given the technological advancements, and the cost expenditures as opposed to constructing a new undersea optic fibre cable system through a trade-off study of a new build versus upgraded existing undersea optic fibre cable system.
1.4. Research Objectives and Questions
The objective of this dissertation is to provide a trade-off study of a new build versus upgraded existing undersea optic fibre cable system. Ideally, the existing cable systems are typically operating at bit rates (same as channel rate) of 10Gbps per wavelength and are upgraded to wavelength bit rates of either 40/100Gbps, as opposed to the establishment of a completely new undersea optic fibre cable system
5
operating at 40/100Gbps. The emphasis will be on the procurement and implementation of this type of systems i.e. new build vs upgraded. The research intends to investigate answers to the following research questions:
1. What are the logistical activities conducted for the new build versus upgraded undersea optic fibre cable system? 2. What are the timelines/lead times for the implementation of the new build versus upgraded undersea optic cable system? 3. What is the effectiveness of upgrading the existing undersea optic fibre cable systems which are either congested or near design capacity, as opposed to building new undersea optic fibre cables? 4. What are the key enablers of extending the initial ultimate design capacity of an existing undersea cable system beyond its initial design? 5. What are the commercial benefits/drawbacks involved in upgrading existing undersea communication cable systems compared to new-built cable systems?
1.5. Significance of the research
The significance of the research is to ascertain the extend at which the existing cables are being built and upgraded, if the existing cables are being upgraded extensively then this will impact the amount of new cables being constructed, this can aid potential system purchasers and owners in deciding the route to follow when investing . The study will endeavour to assist cable owners to consider extending the design and commercial life of existing cable systems through system upgrades and thereby increasing the economic viability of the cable system and saving on investment amounts for new systems.
1.6. Research delimitations
The research explores a trade-off study of a new build versus upgraded existing undersea optic fibre cable system; the upgraded system capacity is increased from channel rates of 10Gbps to 40/100Gbps whereas new build cable system will operate at 40/100Gbps. With the intention of recommending investments on upgrading existing systems to greater capacities and saving or delaying investment amounts on new cable systems on the same cable routes as the existing cable system. The
6
research was conducted in four cable consortiums which span the African coastline, i.e. WACS, EIG, EASSy and S3W cable systems, with emphasis on the Procurement group members given their activities in the procurement of new cable systems as well as the system upgrades.
1.7. Report layout
Chapter 1: Introduction
The chapter focuses on the overview of the minor-dissertation, the research rationale, the problem statement, the significance of the research study, and the research delimitations.
Chapter 2: Literature Review: undersea fibre optic cable system
The chapter focuses on the literature review of the undersea optic fibre cable system, with emphasis on the composition of the entire system, the development of the cable system throughout the system’s life cycle phases and the upgrade process followed in order to enhance the overall system capacity.
Chapter 3: Research Methodology
The chapter details the research methodology undertaken to achieve the answers to the research questions.
Chapter 4: Research Findings and Discussions
The chapter presents the findings based on the research methods adopted and analysis and discussions of the answers to the research questions.
Chapter 5: Conclusions and recommendations
The chapter provides conclusions and recommendations based on the results and findings obtained.
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References
The chapter lists all the references used in the compilation of the dissertation.
Appendices
This chapter covers all the supplementary documents used in the completion of the dissertation i.e. geographical view of the cable systems, questionnaire, and questionnaire cover letter (email body) and responses from the participants.
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Chapter 2: Literature Review: undersea fibre optic cable system composition
An undersea optic fibre cable system is comprised of two parts namely the submerged plant and the dry plant, an overview of each part is given in the following sections below. Furthermore, the activities undertaken when constructing a new system and upgrading an existing system is outlined.
2.1. Submerged Plant
The Submerged plant is composed of the following elements: optic fibre cable, repeaters, equalisers and branching units.
2.1.1. Undersea Optic fibre cable
The Undersea optic fibre cable is a submerged optical fibre cable used for shallow and deep water use, and is necessary to safeguard the optical fibres against water pressure, chemical aggression and the external aggressions such as anchors or fishing activity throughout the cable design life (Hazell, Little 2002, Yamamoto, Miyazaki 2004, Elsevier Inc). The undersea optic fibre cable is composed of an optical core protecting the optical fibres i.e. fibre pairs for bi-directional communication, bounded by a copper conductor used to power the submerged equipment, and an insulator to seal the copper cable from the sea (Malcolm Johnson ITU 2010). The optical fibre is used for the transmission of the system capacity. There are different types of optical undersea cables used and their placements in the sea are dependent on the depth at which the cables are to be laid or buried. The submarine cables used are: Double armoured (DA), Single Armoured (SA), Light Weight Armoured (LWA), Light Weight Protected (LWP), and Light Weight (LW). A schematic of the type of cables is depicted below.
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Figure 6: Types of undersea cables and a descriptive schematic of the LW cable (Yamamoto, Miyazaki 2004, Elsevier Inc, Libert, Waterworth 2002)
The various applications based on the depth of the cables is summarised in the below table.
LW/LWP cable SA cable DA cable RA cable
Depth (meters) > 1 000 -8000 > 20 –1 500 0 – 20 0 – 20
Table 1: undersea cables and their sea depth
2.1.2. Repeaters
Repeaters are submerged equipment which allows for long-haul optical fibre communication through the use of Erbium Doped Fibre Amplifiers (EDFAs) which boosts the signal to the required power level (Yamamoto, Miyazaki 2004, Elsevier Inc). The submerged plant is designed for bidirectional operation per fibre pair, hence each optic fibre pair will consists of an EDFA pair. A schematic of the repeater is indicated in the below figure.
Figure 7: Undersea Repeater with dimension length: 1500mm and diameter: 300mm (Hazell, Little 2002)
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2.1.3. Equalisers
Equalisers are applied in submarine networks to ensure that the distribution of the signal power is equal, thereby achieving the minimum required bit error rate (BER) for all channels (Hazell, Little 2002). Equalisers uses Gain Flattening Filters (GFFs) to correct distortions caused by the EDFAs and fibre (Hazell, Little 2002). Equalisers have a similar design to the repeater schematic.
2.1.4. Branching units
Branching units (BU) are undersea equipment which connects three cables together, which allow the fibres to be directed individually to two separate cables, hence enabling more cable landing stations to be connected.
Figure 8: Branching Unit, dimensions; diameter and length: 300mm and 1500mm(Hazell, Little 2002, Yamamoto, Miyazaki 2004, Elsevier Inc)
2.2. Dry Plant
The dry plant encompasses a set of equipment situated at the Cable Station, which comprises all of the undersea system transmission equipment such as: the Submarine Line Terminating Equipment (SLTE), Power Feeding Equipment (PFE), Synchronous digital hierarchy Interface Equipment (SIE), and the Network
11
management System (NMS). An overview of this class of equipment is given in the following section.(Hazell, Little 2002, Yamamoto, Miyazaki 2004, Elsevier Inc)
2.2.1. Power Feeding Equipment (PFE)
The objective of the power-feed equipment is to provide a constant current (1A) to the submerged plant. The submerged plant comprises of repeaters, equalisers and branching units. The constant current is supplied mainly to the repeaters through the submarine cable through the embedded copper cable (Chesnoy, JERPAHAGNON 2002, Hazell, Little 2002, Suzuki 2002). The PFE receives an input voltage of 50V DC from the station power source and converts it to DC high voltage to ensure power supply to the chain of repeaters is maintained in the undersea optic fibre cable system(Hazell, Little 2002). The PFEs are implemented at the trunk station (typical max. voltage rating range 12V-18 KV) and branch station (typical max. voltage rating 3 KV)(Hazell, Little 2002, Chesnoy, JERPAHAGNON 2002). The PFE has duplicated units (hot spare) which ensure reliability in case where failure occurs in one of the operating units. One feature of the PFE is that it can double-end feed between two trunk stations, refer to figure 1 for the purposes an illustration, terminal station A and B, which are both trunk (primary) stations can double-end feed i.e. power share the load enabling them to operate at half the their maximum power rating (Hazell, Little 2002, Yamamoto, Miyazaki 2004, Elsevier Inc). Further, one PFE must be able to single-end feed the entire segment from terminal station A to B to ensure availability of the line current. The branch station (also spur station) has a dedicated PFE which powers the branch cable up to the BU.
Figure 9: Undersea fibre cable system configuration comprised of three terminal stations (Chesnoy, JERPAHAGNON 2002)
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Figure 10: Power Feed Equipment (Alcatel-lucent 2014)
2.2.2. Submarine Line Terminal Equipment (SLTE)
Submarine Line Terminal Equipment consists of transmission terminal equipment with multi-channel transmission capability for transmitting data to and from various cable landing stations. The SLTE is high speed transmission equipment and works on a dense-wavelength division multiplexing (DWDM) where it transports the WDM capacity through the submerged plant to various termination points (Hazell, Little 2002, NEC , Yamamoto, Miyazaki 2004, Elsevier Inc). The functions of a 10Gbps SLTE are:
It provides a large transmission capacity more than 1.0 Tbps per fibre pair. It performs wavelength division multiplex and demultiplex functions. It offers flexibility due to its upgradable WDM bandwidth capacities with in- service upgrading facilities, based on operator demands. It is equipped with in-service line supervisory signal insertion/detection facilities for status monitoring of submerged repeaters or equalizers It provides auxiliary communication channels access, such as for the engineering service circuits for operation and maintenance purposes. It provides audible and visible alarm indications for any malfunctions or abnormal equipment conditions for operation and maintenance personnel acknowledgment and provides alarm and status information for the management system.
An example of Alcatel-Lucent’s SLTE 1620 LM equipment is shown below; the 1620 Light Manager (LM) is a DWDM terminal which used in repeatered undersea optic
13
fibre cable systems. It is used on systems operating at N x 10 Gb/s and either as an upgrade for existing systems or in new systems (Alcatel-lucent 2014).
Figure 11: SLTE equipmen 1620 Light Manager(Alcatel-lucent 2014)
2.2.3. SDH Interface Equipment (SIE)
Synchronous digital hierarchy Interface Equipment (SDH) offers the network function and interconnection between the submarine and the terrestrial network systems. Further, the function of the SIE is multiplexing/de-multiplexing, add/drop, protection/restoration, and cross-connection of data/voice traffic. To provide these functions, standard SDH equipment is widely employed standard for undersea optic fibre cable systems.
Figure 12: SIE equipment 1678MCC (Alcatel-lucent 2014)
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2.3. Network Management System (NMS)
A network management system allows for the monitoring of the system through personal computers by getting the status information of the network and the alarms in case of failure. Further, the computer is used as a configuration tool for the system throughout its life. The undersea cable systems are designed based on the telecommunication management network (TMN) which was instituted by the ITU-T; it is a structured network which includes management functions for a telecommunication network (Malcolm Johnson ITU 2010, Suzuki 2002). The TMN structured layers are: Network element layer: it defines the functions for the telecoms equipment. Network element management layer: it manages the network element configuration, alarms and performance. Network management layer: it manages the network connectivity, routing, and protections in different network topologies. Service management layer: it manages the services offered to customers. Business management layer: it manages the overall sales activity.
The undersea cable systems are concerned mainly with the first three layers i.e. network element layer, network element management layer, and network management layer (Suzuki 2002). The network elements (NE) include SLTE, PFE, TEQ, Repeater, and SIE. The management system which manages these elements and the undersea network is the Element Management System (EMS). The EMS comprises of computer system, application software, servers, PC and a printer (Suzuki 2002, Yamamoto, Miyazaki 2004, Elsevier Inc). The EMS is deployed at each terminal station to manage and supervise the terminal and submerged equipment, and is represented in the figure below.
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Figure 13: Element Management System equipment (Suzuki 2002)
The general system configuration for the EMS is depicted in Figure 14. The management information between the EMS serves is obtained via the 2Mbps Data Communication Channels (DCC); these channels are provided at the SLTE level and are duplicated to ensure continuity in communication in the event of the DCCs channel fails.
Figure 14: Configuration of EMS
2.4. Undersea optic fibre cable System Integration
For the purpose of illustrating the interconnectivity of the undersea optic fibre cable system equipment, a hypothetical two fibre pair system with four cable landing stations is considered. In this illustration, the power feeding equipment, Submarine Line Terminating equipment layouts and in-station equipment connectivity will be shown.
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2.4.1. Power Feeding Equipment System powering layout
The power feeding equipment layout is indicated in the figure below, PFE A, and PFE D represent the trunk of the system whereas PFE B and PFE C represent the branches of the system.
PFE A BU BU PFE D +10Kv -10Kv Repeater
Repeater
PFE B PFE C -3Kv -3Kv
Figure 15: PFE powering of trunk-and-branch layout
2.4.2. Submarine Line Terminating Equipment layout
The figure below depicts the two fibre pair layout of SLTEs between the stations. A DWDM undersea optic fibre cable system consists of landing stations interconnected by a submerged line cable. The submerged line cable supports the transmission of the signals from one landing station to another. The SLTE adapts and multiplexes SDH signals for submarine optical transmission.
Digital Line Section (DLS): A DLS is an assembly formed by the SLTE, BU and/or repeaters, connected to the same fibre pair, the figure below demonstrates this, e.g. SLTE A –to –SLTE B linked by the yellow line is a DLS in the figure below. The configuration in question is for a two fibre system, and will have two SLTEs for each pair.
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SLTE SLTE
BU BU
SLTE SLTE
Cable Landing Station D
Cable Landing Station A
SLTE SLTE SLTE SLTE
Cable Landing Station B Cable Landing Station C
Figure 16: SLTE connectivity between the stations layout
2.4.3. Cable Landing Station Equipment Connectivity The cable landing station houses several equipment in each station, and listed below:
Cable termination box – separation of the fibres and power feed cable, Power Feeding Equipment, Submarine Line Terminating Equipment, SDH Interface Equipment, Element Management System, Network Management System, and Craft terminals – PCs which interface with the equipment operator.
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To terrestrial networks Cable SIE SLTE Termination Box Undersea cable
NMS EMS PFE
Figure 17: Cable Landing Station Equipment Configuration
2.5. Reliability and Availability
Reliability is a vital design consideration for undersea fibre optic systems due to the system carrying a high volume of traffic over long transoceanic distances. The reliability of components and devices is measured in units of failures in time (FITs) which implies to 1 failure in 109 (Anslow 2010). The reliability of the undersea fibre optic systems is split into two parts i.e. availability of the terminal plant and ship repairs of the submerged plant (Hazell, Little 2002).
The availability is defined by the Mean Time Between Failure (MTBF) [MTBF (h)
9 = (1×10 ] and Mean Time To Repair (MTTR). MTBF is determined by summing 퐹퐼푇푆(푏𝑖푙푙𝑖표푛 ℎ) all the failure rates of the terminal plant equipment and MTTR is normally presumed to be 2-4 hours.
2.5.1. Failure rate analysis of the undersea fibre optic cable
For high reliability to be attained, it is imperative that the internal fault such as fibre loss increase, repeater (EDFAs) failures, card failures etc. be minimized. Consider the bath tub curve below which depicts the failure rate behaviour of an undersea fibre optic cable system.
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Figure 18: bath tub curve of undersea fibre optic cable (Anslow 2010)
Infant mortality In this region, components used in the undersea cable system display a high failure rate which is decreasing with time; this failure rate is attributed to improper manufacturing process. For infant mortality to be deemed true, a batch of components must exhibit a pattern of failure. The period of infant mortality is about 1 – 2 years (Anslow 2010)
Random failure The region next to the infant mortality is characterized by a lower failure rate. This region is named the useful life because the failure rate is almost constant until the beginning of the wear out region.
Ageing The failures are due to aging, material fatigue.
2.5.2. Submerged plant reliability
The submerged plant is more critical than the terminal plant of a submarine system with regards to reliability because the high MTTR. Typical MTTR values are about 2 weeks, this is to give intervention of a cable ship is necessary) for the submerged
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section repair instead of 2-4 hours for the terminal plant (Anslow 2010). Ship repairs are determined by summing all the failure rates of the submerged equipment. Ship repairs are based on design failures of components and exclude effects of external aggression i.e. fishing, anchorage, etc. Undersea fibre optic systems typically have two forecasted ship repairs during the 25 years design life with the exclusion of external aggression (Anslow 2010). Furthermore, it is important to note that the submerged plant (i.e. repeaters, BUs, and equalisers) is considered non-repairable, implying that a component failure could lead to long network downtime as this component will have to be replaced, to mitigate the effects of the submerged plant failures, and redundant configurations are used. The undersea fibre systems are expected to have an outage less than 10 minutes per year; this corresponds to an availability of 99.9981% (Anslow 2010, ITU- T G series – Supplement 41 (06/2010)).
The reliability in undersea networks is attained through quality control and equipment qualification. Quality control entails procedures that are conducted during the concept phase throughout the design, development, manufacturing, and operational phases. The reliability is considered from the initial planning phase, including the component technology to be used and the identification of the preferred suppliers. Failure rates are obtained mainly from field data of the same components and manufacturer’s component data. Qualification tests are carried out once the quality control factors have been identified; the tests are conducted on an accelerated environment to reflect the reliability of 25 years design life on a sample. Destructive and burn-in tests are also conducted to ensure component reliability (Anslow 2010, Hazell, Little 2002).
2.6. The development and implementation of an undersea optic fibre cable system
The construction of an undersea optic fibre cable system is an intricate industrial project, no two cable projects are the same, and each project will have specific challenges and issues that will need to be carefully considered. In this section, consideration of the process undertaken in the procurement and development of an undersea optic fibre cable through the life cycle phases will be explored.
The life cycle phases of an undersea fibre optic cable system throughout the conceptual/planning, development, implementation /construction and close-
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out/utilisation phases will be discussed. Attention will be given to the procurement, logistics and management activities of an undersea cable system, the challenges confronted and their mitigations. The development of an undersea cable system is considered due to the following conditions (mGreen 2014):
Capacity demand - to meet projected growth on an existing/ new route, this capacity demand is a stimulant for a new cable when opportunity to upgrade existing cable in the same path has been depleted; Connectivity demand - to new areas which have not been serviced previously; Political demand - for new routes to support economic development e.g. East Africa Submarine Cable System (EASSy) which serviced the eastern coast of Africa, prior to the establishment of this cable, only satellite communication was used, which was costly.
2.6.1. The Life cycle phases of an undersea fibre optic cable system
The development of an undersea fibre optic cable system comprises of four project phases, the key elements within the life cycle phases will be discussed in the following sub-sections. The conceptual phase, is comprised of the preliminary feasibility development and is concluded with the establishment of the memorandum of understanding (MOU) between the initiating parties; the development phase, is comprised of the advanced feasibility development whereby the phase concludes with the construction and maintenance agreement and the supply contract being developed; the implementation phase is comprised of the manufacturing and installation activities, financial processes, licencing and permits, the phase concludes with the system being ready for provisional acceptance (RFPA); the utilisation phase includes the handover of the system to operation and maintenance group, this phase concludes with the final acceptance (FA) of the system following lapsing of the warranty period.
2.6.2. Phase I: Conceptual/ Planning
2.6.2.1. Feasibility studies
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The feasibility study can be considered, as the stage at which the initial viability and time scales of the project are determined and the primary risk areas identified (Horne 2002) . It is undertaken prior to signature of the supply contract and will help to determine the respective responsibilities of the cable owner and the system supplier. The parties responsible for providing an input to these studies vary, depending on the expertise of the prospective cable owner (Horne 2002). The objectives are (Suzuki 2002):
Are the cable owner’s requirements fixed or may they be subject to change during the planning phase to meet new commercial challenges? These may arise from the launch of a competing cable system or the need to change the network reach. What is the appropriate choice of network topology, i.e., ring, festoon, point to point? What is the system’s technical, operational, and capacity requirements, taking into account any potential system or capacity upgrades? With the increasing pace of technological change, can the supplier offer an alternative system network solution while this phase is under way? Where are the cable system terminal stations to be located? Can appropriate land be purchased, and can planning and building permission together with appropriate rights of way for the land section be obtained? Can connection to suitable terrestrial capacity from existing operators be obtained, or is it possible for the cable owner to construct a terrestrial cable network to the desired city centres? What are the potential political and commercial issues, which are related to Permits and operating license requirements, and what are the processes and The likely time scales to achieve them? who are the potential investors
2.6.2.2. Financing a New undersea optic fibre Cable
The cost of an undersea cable is extremely high; the price ranges between USD 500Million to USD 1Billion (hundreds of millions of dollars) for long-haul intercontinental, transpacific, transatlantic, or transoceanic cables i.e. for cables with span lengths greater than five thousand kilometres. This is the reason communication carriers venture into such projects within consortia or clubs to share
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the expenditures. The typical funding model is that involving the consortium of telecom carriers, in which the investment is apportioned. The funding model is that of equity financing, i.e. each carrier invests a direct portion into the consortium (Lipman, Pin et al. 2012).
A typical cash flow of a hypothetical undersea optic fibre cable system is indicated on Figure 19 below.
Figure 19: Cash flow excursion during system economic life
Cash flow is a means in which the value of undersea optic fibre system is measured, when the revenue starts to decline as in Figure 19, that’s when the key indications of the economic lifespan become evident and when the cash flow become negative the system is declared to be at its end of its economic life (Szajowski, Soloway et al. January,2010). Indefeasible Right of Use (IRU) is a means that an undersea optic fibre system owners use to generate revenues by selling capacity to respective customers. An IRU is a contractual agreement in which once in force, the purchaser of IRU has right to a proportion of the capacity, proportion of the maintenance costs (Conradi 2010). Another means to generate revenue is to issue pre-RFS (Ready For Service) sales to potential clients.
2.6.2.3. Business case development
A business case establishes the objectives of starting the project, provides high level system design features, expected utilization period. The collected information is used to determine the viability of going ahead with the system investment or not. The business plan goes together with the feasibility study. The objective of the business case is (Lemberg 2012), (Lipman, Pin et al. 2012):
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Includes market research concerning the traffic demand survey and the current bandwidth availability on existing cables, CAPEX estimates, The kind of technology to be implemented in the new cable system and its upgradability requirements to resolve future traffic network congestions, System features i.e. cable route, cable configuration, and terminal equipment protection, Determine the bill of quantities/materials (BoQ/BoM) based on previous equipment purchases, The provisioning of rough order magnitude of costs (sourced from the supplier) which are to be used in the procurement of the system equipment, as well as installing and up to the commissioning of the overall system, Road-shows to verify other carriers interest in the project, especially at data gathering meetings (DGMs).
2.6.3. Phase II: Development
This phase encompasses the confirmation of agreements, the commitment of capital by all investors as well as the procedures to be followed when commencing with construction of the undersea optic fibre cable system. The notion of an undersea cable system is initiated by a single telecoms carrier, which develops the requirements for the system. This requirement includes factors such as: system capacity, proposed configurations, technology to be used, commercial principles and the completion dates of the system construction (Lentz 2012). Following this activity, the initial company then identifies other companies with an interest in investing in the cable system and or becoming a landing party. Together, the initial company and the identified companies are referred to as the initial parties (Green 2014).
The relationship amongst the initial parties is documented in the Memorandum Of Understanding (MOU), which stipulates the prime activities to be undertaken in the development phase, activities such as: funding the cable, capacity allocation, operations and maintenance costs. In the development phase, key decisions will be made concerning the cable route, system configuration, system implementation timescales, and the project budget (Green 2014, Brask May 2006).
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The development phase is inclusive of the creation of the invitation to tender (ITT) document which comprises of the technical and commercial specifications, the terms and conditions, all of which will form part of the system supply contract. The ITT, once developed, is issued to the potential suppliers, through a tender process, from which the preferred supplier is selected (Green 2014) once the process is complete.
In this process, system purchasers represented by the procurement group, issue requests for proposals to potential suppliers, and administer the procurement activities of the system, this process will be elaborated in this section.
The following items are concluded and others are initiated in this phase:
The Construction and Maintenance Agreement (C&MA), Procurement process inclusive of the request for information (RFI), request for quotation/ Proposal (RFQ/RFP), adjudication process, and the awarding of the system supply contract to the preferred supplier, Pre-supply contract activities such, marine survey, and desktop study, Landing Party Agreements, maintenance agreements, and cable crossing agreements, Licenses and permitting.
2.6.3.1. Construction and maintenance agreement (C&MA)
The C&MA is a legal agreement which binds all investors together to invest in the new undersea cable system. It is the primary governance contract for the undersea cable system (Green 2014). The C&MA administers the relations between consortium affiliates, i.e. how meetings are to be organized, how to reach decisions, how the supply contract is to be implemented, managed and the upgradability and decommissioning of the system amongst other things will be conducted. The C&MA describes how the wet/dry plant, cable stations and operations and maintenance costs will be settled and how capacity is to be sold (Conradi 2010).
The C&MA follows a structured organizational structure, with the Managing Committee (MC) at the helm and is responsible for the oversight of the undersea cable system as well as the enforcement of the C&MA. Decisions are based on a voting majority of the managing committee members. The MC is supplemented by a variety of Sub-committees to carry out the functional aspects of the undersea cable
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system. The typical undersea cable system organisational structure is indicated on the organogram below:
Managing Commitee
Assignments, Routing Financial & and Restoration Investment & Commercial Operations & Procurement Subcommittee Agreement Subcommittee Maintenance Group (PG) (AR&RSC) Subcommittee (F&CSC) (I&ASC) Subcommittee (O&MSC)
Overall Network Restoration Administrator (NA) Liaison Officer (ORLO) Central Billing Party (CBP)
Commercial Technical Work Work Group Group (TWG) (CWG)
Figure 20: C&MA Organizational structure for Consortium based undersea cable system
The other supplementary sub-committees are:
I&ASC– Investment & Agreement Sub-Committee: responsible for the commercial activities for the cable system, interpretation of the C&MA F&CSC – Financial & Commercial Sub-Committee: responsible for the managing of the financial activities i.e. budgets. CBP – Central Billing party: it is responsible for issuing bills and receipt of payments from parties with respect to the capital and operations & maintenance payments, it also pays suppliers according to the agreed billing schedule. O&MSC – Operations & Maintenance Sub-Committee: is responsible for ensuring the operational integrity of the cable system, maximize the availability of capacity, minimize repair operations. AR&RSC – Assignments, Routing & Restoration: responsible for the technical operation of the system, optimizing the system usage, traffic modelling.
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NA – Network Administrator: Are responsible for interfacing with cable system users, issuing capacity and keeping records of capacity usage. ORLO – Overall Restoration Officer, PG – Procurement Group: the primary group, responsible for the construction of the system through the negotiation with suppliers, developing the supply contract and the overall project management. TWG – Technical Work group: it’s a subgroup of the procurement group, and it assists with the technical aspects of the cable project. CWG – Commercial Working Group: it’s a subgroup of the procurement group, and it assists with the commercial aspects of the cable project.
For the purposes of this research, the focus will be primarily based on the activities of the Procurement Group (PG) as these activities are in line with addressing the research questions and objectives.
2.6.3.2. Procurement Group activities
The procurement group has the core procurement function of ensuring that the supply contract provides the undersea cable system in time and in budget. The PG group as part of its activities develops and issues requests for proposals (RFPs), issues tenders and procures the system with the preferred supplier, co-ordinates and reviews work done during the construction of the wet and dry plants, it reviews the supply contract expenses against budget and target completion dates. The procurement process for acquiring an undersea optic fibre cable is as follows:
An undersea optic fibre cable system is supplied on a turnkey basis and the supply contract is the main deliverable between the purchasers and supplier/s (West 2010). The invitation to tender (ITT) process begins with the preparations of the technical and commercial specifications and the drafting of the supply contract. This is then followed by a decision amongst the purchasers whether to seek a single supplier through a sole source or go through a competitive bidding process. Generally, the competitive route is the preferred choice, in which a list of preferred bidders is formulated; this list of preferred suppliers is issued with a Non-Disclosure Agreement (NDA) regarding the new system purchase, if the suppliers are interested a Request For Proposal for the system will be issued, thereafter, followed by RFP clarification stage. The ITT states that each bid must include a statement of compliance in tabular
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form stating whether the bidder complies or does not comply with each listed clause of the ITT. Upon receipt of the bids, an adjudication of the offers will be conducted by considering the bidder with the most lists of compliances (Carter 2007), the outcome of this activity will be a shortlisting of the bidders. The next stage will be to convene a meeting with the shortlisted bidders and seek clarification of the submitted bids, following this, a Best And Final Offer (BAFO) from the shortlisted bidders, from which the preferred bidder will be selected, then negotiations, supply contract forming and contract signature will be concluded (Stafford 2013). Figure 21 below summarizes the typical procurement process.
Prepare Yes specifications & Compete? Select Bidders draft contract Solicit Interest &Non-disclosure Agreements
Issue RFP Clarify RFP Receive Bids
Adjudicate Clarify Bids Offers
Request Best and Final Offer (BAFO)
Select preferred supplier Negotiate, form, sign contract
Figure 21: undersea cable system procurement process
2.6.3.2.1. Supply Contract documentation
The supply contract is a legal document which binds the undersea cable system owners and the system supplier for the construction of the undersea fibre optic cable system (Stafford 2013), it governs the relationship between the supplier and the purchaser. The supply contract characterizes all terms necessary to deliver the system. It contains contract documentation divided into six parts viz.:
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Terms and Conditions, Price Schedule, Billing schedule, Plan of Work, Technical Specification, Supplier’s System Description.
These six parts of the supply contract address commercial and technical specifications. For the commercial specifications the following is covered (Stafford 2013, Leclerc, Thomine et al. 2004):
supplier scope of work, purchaser responsibilities, price and payment terms, system delivery date requirements, system acceptance terms, warranty, guarantees and liquidated damages, long-term support requirements, system upgradability requirements, Contract variations/termination, and force majeure (natural phenomena, man- made phenomena e.g. political instability).
The technical specification part puts detailed emphasis on system characteristics such as (Stafford 2013, Leclerc, Thomine et al. 2004):
the equipment and system functionality, system availability requirements, environmental requirements, marine requirements, spares provisioning requirements, quality assurance, network and commissioning, Operations and maintenance requirements.
2.6.3.2.2. Landing party agreements
The landing party is a licensed telecommunications company, which makes provision for the landing facilities such beach manhole, cable stations, ducts, services
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(operations and maintenance services) and regulatory approvals to land a cable system in a specific country (Conradi 2010, Leclerc, Thomine et al. 2004). The landing party in a consortium cable is an investor in the cable and the agreement for landing facilities and services are contained in the C&MA (Stafford 2013, Mick 24 Oct 2013). The landing parties provide a landing point in which cables will be terminated, this in turn will provide benefit to cable owners with regards of usage of the cable in a particular country. Other obligations of the landing parties are to assist in provision of local licenses and permits within their respective countries.
2.6.3.2.3. Desk Top Study and Marine Route survey
The marine activities in summary are: desktop study, route selection; survey, seabed assessment, and route assessment; burial feasibility study; burial operations, and finally cable awareness program to other seabed users (Lionel Carter ).
2.6.3.2.3.1. Desk Top Study
A desk top study provides preliminary information for use in the design, construction and maintenance of the System (Stafford 2013). The desk top study is mainly used to select and verify cable landing sites, identify the cable marine route, assess risks for the proposed route i.e. other cable or oil pipeline crossing, fishing risks, anchorage risks, seismic and human activity risks, identify the protection requirements for the cable i.e. type of cable armour to be used, the burial depth of the cable, cable manufacturing, identify permitting requirements and identify information that will affect the schedule and ease of installation and maintenance of the wet/ submerged plant (Stafford 2013, Brask May 2006, Horne 2002, Lionel Carter ). The desk top study is conducted prior to the supply contract coming into force in order to optimise the project lead times.
2.6.3.2.3.2. Marine Route survey
It defines and finalises the documents for the perspective route, It provides the system supplier with the data necessary to establish the installation procedures,
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It ascertains any potential post installation risks and tectonic activities during the system design life.
2.6.3.2.4. Permitting in undersea cable projects
Permitting refers to the substantial amount of permissions required to construct, own and operate a cable network, as well as permissions from local governments to land the cable in the local territory also to transit their territorial waters, operational permits, environmental permits, rights of way, agreements with local fishermen (Stafford 2013, Gerstell 2010). Large scale undersea optic fibre cable systems require several permits and licenses during the construction of the system (Gerstell 2010).
The evaluation of the permitting issues and the potential risks during the planning and implementation phase is of paramount importance in the reduction of the overall cable project risk, particularly during the system installation activities (Gerstell 2010, Toombs 2010). Permits in the undersea optic fibre cable projects can be classified as system supplier and system owner permits, these classes are discussed in the following two sub-sections.
2.6.3.2.4.1. System supplier permits
These permits pertain to the operations during the implementation phase whereby the installation of the undersea cable is undertaken (Martin 2010). The supplier is obligated to acquire permits, licenses, and consents in order to perform marine route survey and installation activities, permits such as (Stafford 2013, Martin 2010):
harbour and port clearances and notices, vessel operational permits, Local permits to perform work in a particular country, work visas for personnel, beach crossing permits, Construction permits e.g. beach work, beach crossing permits, beach man hole.
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2.6.3.2.4.2. System Owner/Purchaser Permits
These permits pertain to the inhabitation of the seabed and the operation and maintenance of the undersea fibre optic cable system throughout its life cycle phases. The purchasers are obligated to obtain all permits, consents, and licenses regarding the implementation, landing, and operation of the undersea optic fibre cable system (Martin 2010, Stafford 2013).
Some of the System Owner permits required are listed below:
seabed occupancy permits, cable maintenance agreement permit, cable station landing licenses, environmental impact assessment certificate, Operator licences, port authority notification, fisheries industry permits(fishermen agreement), Cable/pipeline crossing agreements.
Furthermore, permits can be classified as survey permits, these allow for access to the territorial waters and economic zones for the exploration of routes; the other type of permits is the installation permits.
2.6.3.2.4.3. Permitting risks and Mitigations
Permits are one of the challenging features of the undersea optic fibre cable project as the precise scope of permitting exercise is unknown until later in the project stages due to the sheer multiple types of permits involved (Gerstell 2010, Stafford 2013). For maritime permits, for instance, labour and fuel costs are incurred in the course of cable laying and repair ships waiting on standby whilst permits are being obtained (Gerstell 2010). Permitting delays can cause a ripple effect to the implementation schedule, shipping schedules and the overall statement of work of the project (Gerstell 2010, Toombs 2010). It is important to treat permitting as a project risk, to effectively minimise and mitigate permitting; the following is significant (Carryer 2010):
Definition of responsibilities,
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Encourage team work among consortium team members, Project scheduling to take account of requirements for key permits, Encourage transparent communication among parties.
The main project risks are those relating to permits in the maritime activities and cable landing station construction/activities. To mitigate these risks, it will be vital that there be a permit management team, and for cable construction it is vital that there be contingency plan and a management plan in getting the cable constructed on time and within budget (Toombs 2010, Constable 2010).
2.6.4. Phase III: Implementation/Construction
The objective is to complete the cable project in accordance to the defined contractual requirements stated in the supply contract, hence the implementation phase starts when the supply contract is in force. At the conclusion of the implementation phase, a fully operational undersea fibre optic cable system must be delivered (Dhooper, Jingwei 2010). The following activities are conducted:
Wet and dry equipment manufacture and assembly, Marine activities (e.g. desktop studies, surveys, screening of sea floor and route), Cable stations are built if non-existent, Shipping activities(e.g. supplying material for the construction of cables, getting permits), System Installation activities (consolidation of all systems implemented), Testing and Acceptance i.e. station/system tests, factory acceptance testing.
In this phase, cable landing sites are constructed, and quality assurance of the system equipment in its entirety is verified throughout the stage e.g. cable route verification, network acceptance plan, permits in place, equipment manufacturing and procurement (Brask May 2006). Figure 22 below illustrates an overview of the flow of activities starting from the issuance of the invitation to tender (ITT). Following the ITT, contract forming will start whereby the negotiating take place for about two to three months (Brask May 2006), in parallel to contract forming, long-lead material orders are placed to avoid manufacturing backlog, further the desktop results are provided and will be used to ascertain the route survey and the permits applicable upon contract signature.
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As the undersea fibre optic cable project moves into the manufacturing phase, Factory Acceptance Tests (FATs) are an essential facet of equipment operability, all manufactured equipment is tested in the factory and the results are provided to the purchaser (Brask May 2006). Following manufacturing, installation of the equipment follows at various sites of the dry plant and the wet plant. Commissioning of the system will follow upon completion of the installation program then Ready For Provisional Acceptance (RFPA) of the system then follows (Stafford 2013, Brask May 2006). Commissioning will be discussed in the following subsection.
ITT
Contract Long Lead Desk Top Forming Procurement
Contract
Survey Manufacturing & Procurement
Installation
Commissioning
RFPA
Figure 22: undersea cable procurement flow chart (Brask May 2006)
2.6.4.1. Commissioning and Acceptance
Commissioning denotes the demonstration of the performance factors. Acceptance refers to all activities including procedures, tests, and approvals which confirm that contractual items have been achieved. Commissioning and Acceptance is contractual in nature and is divided into specific periods which are directly linked with
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the billing milestones of the billing schedule of the supply contract. The list below indicates the commissioning and acceptance periods:
Product design acceptance (period I),
Factory acceptance testing (period II),
Submerged plant assembly acceptance (period III), System loading and laying testing (period IV),
Site acceptance testing (period V),
System end-to-end testing (period VI),
System confidence trial and provisional testing(period VII),
System final acceptance (period IX).
2.6.4.1.1. Product design acceptance
Period I encompasses activities such as:
Product qualification status,
Technical clarification of assumptions made,
Technology demonstration to verify to functionality and interoperability.
2.6.4.1.2. Factory acceptance testing
The objective of the test is to verify that the system equipment meet the contractual requirements. The tests are:
SLTE acceptance,
PFE acceptance,
Cable acceptance,
Repeaters acceptance,
BU acceptance,
Equalizers acceptance.
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2.6.4.1.3. Submerged plant assembly acceptance
The objective of this test is to verify that the submerged plant conforms to the system requirements. The tests conducted are:
Optical Signal to noise ratio test (OSNR),
Chromatic dispersion tests,
Voltage/current tests,
Supervisory tests,
Bit error rate (BER) tests.
2.6.4.1.4. System loading and laying testing
The objective is to ensure that the cable performance parameters are stable during the loading and laying of the submerged plant. The tests conducted are:
OSNR tests,
Voltage/current tests,
Supervisory tests,
BU tests.
2.6.4.1.5. Site acceptance testing
The tests are conducted following the installation of terminal station equipment to verify functionality. The tests are:
ONSR launched from the SLTE tests,
PFE and spare performance tests,
SIE tests,
Terminal software tests.
2.6.4.1.6. System end-to-end testing
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The tests are conducted when both the submerged plant and the terminal stations are completed and hence the requirement for the end-to-end testing requirement to show system functionality. The tests are:
Transmission tests,
Design capacity demonstration test,
Submerged plant supervisory tests,
Software tests,
System interfacing tests,
Protection and restoration tests.
2.6.4.1.7. System confidence trial and provisional testing
The confidence trial is the test period in which the demonstration of the installed system with no errors is indicated. Provisional acceptance of the system is granted to the suppliers through the issuance of the provisional acceptance certificate. The certificate is issued provided the supplier has met all requirements as stipulated on the technical specification of the supply contract.
2.6.4.1.8. System final acceptance
The final system acceptance of the undersea fibre optic cable is granted to the system supplier by the system purchaser after the warranty period (typically 5 years) provided that the following points are satisfied:
That no pattern of failure of the system has been observed that will cause the system to operate differently from the contractual requirements,
That the final acceptance test indicates that there are no anomalies or deficiencies and that overall performance is in accord to the technical specifications of the contract.
Figure 23, illustrates the summary entire implementation process activities of the undersea optic fibre cable system.
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System Design
Marine activities
Marine Contract Route Marine Cable Load & Survey Installation into selection/ Route Lay and Burial permits permits Force approval Survey Work
Cable
Cable System Procurement Manufacturing Assembly & amouring
Submerged /Wet Plant Commissioning System Testing Acceptance Procurement Repeater/BU Manufacturing
Terminal/Cable Station Equipment
Terminal Station Customs Procurement Installation In- Equipment Clearance & station Testing Manufacturing Transportation
Cable Landing Station activities
Land Terminal Station Building acquisition Construction Powering/ HVAC
Figure 23: Implementation process activities (Dhooper, Jingwei 2010)
2.6.5. Phase IV: Close-out/Utilization
In this phase, the system has reached operational status and the management of facilities and agreements is maintained. The system will be operated for a period of 25 years in correlation with the stated design life (Leclerc, Thomine et al. 2004). Operations and maintenance activities include the monitoring and management of the undersea cable network for both the submerged/dry plant, preventive and corrective maintenance plans of cables and stations, spares provisioning (Leclerc, Thomine et al. 2004). The following list indicates items in this phase:
O&M contracts and maintenance plans, Interfaces with the network operations centre, Implement and manage backhaul (i.e. from cable landing station to the terrestrial system) agreements,
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Notify customers of support services and procedures, Maintenance planning inclusive of repair and restoration plans, Warranty management, Technical support, NOC will operate 24/7/365 throughout system design life and must be staffed accordingly, Readiness tests – includes site testing and validation of trained personnel, system access, equipment access and documentation. The Network Operation Centre (NOC) will provide the supervision of the entire system network. The NOC’s task includes amongst others:
The implementation and supervision of traffic, Fault localisation, System utilization records and traffic trends.
2.6.6. Project timelines
The undersea fibre optic cable system new build project timeline is typically as follows (Stafford 2013):
Concept/planning phase: 4 – 6 months, Development phase: 6 – 24 months, Implementation/Construction phase: 12 – 24 months, Close-out/ utilization Phase: 25 years (design life)
Table 2 below summarises the high level activities that must be met on each phase of the development of an undersea optic fibre system.
The figure below indicates the summary of the requirements for new build cable system
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Phase 1: Concept/ Phase 2: Phase3: Phase 4: close- planning Development Implementation/Constructing out/utilisation
Operations Administration & Maintenance Contracts, Analyse Demand, Develop Technical Maintenance Plan Market and & Commercial (Submerged & Revenue Potential Requirements Permitting & Regulatory Approval s Terminal)
Establish Network System Design and Issue RFP to Operations Centre Cost Analysis suppliers Route Survey (NOC)
Adjudicate Bids, Project Management: BAFO & Select Supplier Oversight and ensure Feasibility Study Vendor Contract Management Backhaul Agreements
Submerged and Terminal Plant Compare & Decide Manufacture. Quality Assurance & Network Readiness Configuration(s) Develop C&MA Acceptance Test
Identify & Preliminarily Secure Landing Party and Secure Landing, Partner Access and Backhaul Landing Party Preparation: Station, MOUs Arrangements Readiness Customer Support
Develop Operations, Business Model & Issue Invitation to System (Submerged & terminal) Maintenance & Plan Tender (ITT) Installation Oversight Restoration
Site Test , Commissioning & Acceptance Desk Top Study Oversight System Upgrades
Table 2: System requirements of an undersea fibre optic cable system (Stafford 2013)
The following Figure 24 illustrates the responsibilities between the consortium and the supplier during system implementation.
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Terminal Station Marine Activities Cable Equipment
Undersea Fibre Optic System Supplier
System Purchasers (Procurement Group)
Station Land Route Maintencance
Network Network Operations Adminstration Centre
Cable Landing System Backhaul stations Synchronisation
Figure 24: System Supplier & Purchaser responsibilities
2.7. Upgrading Capacity of an existing undersea fibre optic cable
The interest in upgrading undersea fibre optic cable systems by altering the terminal station equipment began during the years 2006/7 due to technological progress which was driven by new undersea cable suppliers (Pirio 2013). System purchasers invest a huge capital expenditure in the construction and implementation of an undersea fibre optic cable, and as a result a long economic service and expandability on capacity is required, this is best achieved through system upgrades (Courtois November 2013, Dhooper, Jingwei 2010). The system owners want to use the existing fibres and elements to maximise revenues from infrastructure that is already in place, also they want to improve operational flexibility which will infer efficient service provisioning to their clients. With the proliferation of technologies for instance DWDM and coherent technology, the maximum design capacity of an existing undersea fibre optic system can be extended beyond its original design specification (Dhooper, Jingwei 2010, Salsi, Bertolini et al. 2009) and allow high capacity transmission.
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System purchasers composed of differing telecoms companies invest in an undersea fibre optic cable system in exchange for the acquisition of capacity for various use in proportion to their capital investment, the capacity used is described below (Mick 24 Oct 2013):
Initial equipped capacity – it is the capacity available following commissioning activities and ready for service date, Activated capacity – it is the capacity of the system purchaser which is activated and carrying traffic, Assigned capacity – it is the capacity allocated to the system purchasers on the network system and its proportional to the capital investment, Equipped capacity – it is the capacity of the system at a given time, it is comprised of the assigned capacity and the reserve capacity, Reserve capacity – it is the capacity that has not been allocated but is available for allocation, Design capacity – it is the maximum total capacity that can be installed on a system, Upgrade capacity – it is the capacity that is installed on a system as the system gets constrained by traffic. This upgrade capacity can be below or above design capacity is dependent on the technology utilised.
For the purposes of this research, the focus will be on the upgrade capacity which is greater than the original design capacity.
2.7.1. Upgrade Capacity enablers
Prior to system upgrades beyond design capacity, the initial equipped capacity of the system was upgraded in steps based on the demand until the maximum design capacity was reached by adding channels at the same wavelength rate i.e. 10Gbps, the design capacity mentioned here, implied that there was no technology improvement considerations by the original system supplier (Dhooper, Jingwei 2010, Courtois November 2013).
The vital optical technology behind undersea fibre optic cable system upgrades has experienced changes over the past several years. The undersea fibre optic cable systems currently being upgraded were designed for 10 Gbps wavelengths, characteristically operating at On-Off keying (OOK) and Differential Phase Shift Keying (DPSK) modulation formats. The fibre plant was also designed for these
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transmission formats. The undersea fibre optic upgrade market has moved towards 40 Gbps and 100 Gbps channel rates, which leads the large majority of today’s undersea fibre optic cable systems upgrades (Dr. Grubb January 2014, Schwartz, Freund et al. 2006). Key upgrade elements are discussed:
Spectral efficiency indicates the achievable capacity and is attained by the combination of the bit rate conveyed by each carrier and channel spacing for each carrier. Table 3 below indicates the evolution of the spectral efficiency as the channel bit rate increases (Blondel 2013).
Carrier bit rate (Gbps) Channel spacing per Spectral efficiency carrier (GHZ) (bit/s/Hz)
10 50 0.2
10 33 0.3
10 25 0.4
40 50 0.8
40 33 1.2
100 100 1.0
100 80 1.25
100 50 2.0
100 40 2.5
Table 3: Spectral Efficiencies of differing channel rates (Blondel 2013, Summers, Crochet et al. 2013)
Coherent detection is one key factor which has enabled high capacity increases, the technology provides for high performance and robustness against transmission impairments. It allows for the use of mixed modulation formats to be used on a specific route for optimal performance. This technology has a high tolerance for polarisation mode dispersion, making it possible for high bit transmission on existing systems (Courtois November 2013, Hansen July, 2010).
Modulation formats has enabled the mitigation of the transmission impairments such as non-linearity occurring within the optical fibre. Modulation format have evolved from NRZ/RZ-OOK and RZ-DPSK and towards BPSK and QPSK to achieve this feats.
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Forward error detection the improved FEC is used to improve the system performance, the FEC has evolved from the enhanced FEC, Super FEC, to Soft Decision FEC which allows for high channel bit rate transmission (ITU-T G series – Supplement 41 (06/2010)).
It is worth noting that all these upgrade drivers are complimentary to each other to the improvement of the overall system performance. Figure 25 below illustrates the difference between the capacity growth on the systems with and without the influence of technology (Courtois November 2013, Blondel 2013).
Figure 25: Upgradability of existing systems with or without technological improvement
2.7.2. Capacity Upgrade process
Upgrade of an undersea fibre optic cable system entails the installation of terminal station equipment generally the SLTE, SIE and the network management system that is used for supervisory and management of terminal equipment. During terminal station equipment replacement, the existing traffic on the network needs to be provisioned with an alternative traffic path throughout the commissioning and acceptance testing stages (Czajkowski 2006, Blondel 2013).
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As an example, consider a case in which an existing system is to be upgraded from a channel rate of 10Gbits/s to 40Gbits/s when the channel spacing remains the same at 50GHz, the ratio between 40Gbps and 10Gbps spectral efficiencies is called
퐾푆푝푒푐퐸푓푓 and relates to the maximum number of existing wavelengths that can be inserted with the new wavelengths, in this example 퐾푆푝푒푐퐸푓푓 = 4 which means that four 10Gbps can be inserted to make one 40Gbps.
Consider Figure 26 below as a supplement, step 1: the first wavelength is removed and rerouted to an alternative source, then the new wavelength at 40Gbps is inserted, thereafter four existing wavelengths are transferred in to this new 40Gbps wavelength as shown on step 2, this process is repeated in step 2 and 3 where four 40Gbps wavelength are added and sixteen 10Gbps existing waves are transferred and so forth (Blondel 2013).
Figure 26: addition of 40Gbps channels by removal of existing 10Gbps channels (Blondel 2013)
During the upgrading exercise it is vital that there be an operational optimisation plans, so as not to disrupt commercial traffic on the network, therefore optimum operational windows in which to carry out the work need to be planned and possibly done during periods where there is less traffic on the system network, this is done typically during late nights.
The upgrade process undergoes the same process highlighted in the procurement group activities, with the exception being that only the terminal station equipment is procured instead of the entire system, Figure 27 illustrates the upgrade process. The objective of the open tender procurement through alternate suppliers is to reduce the
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price of the equipment purchased and to attain a high upgrade capacity (Pirio 2013), further the original equipment manufacturer does not always have such terminal equipment for upgrades beyond the initial system design capacity due to lack of the technology at time of the upgrade requirement.
System Design
Contract into Force
System Acceptance
Terminal/Cable Station Equipment
Terminal Station Customs Procurement Installation In- Commissioning Field trials Equipment Clearance & station Testing Testing Manufacturing Transportation
Figure 27: Upgrade Implementation activities
Some activities that are carried are: installation engineering, factory acceptance testing, equipment installation, in-station testing, station integration testing, acceptance tests, training and customer documentation.
2.7.3. Field trials
The aim of conducting field trials on an existing networking is to establish exactly how much upgrade capacity can be achieved given the conditions of the existing system. The following items are conducted in order to ascertain the system features i.e. simulations, system measurements and system age.
2.7.4. Simulations
The performance of the existing wet plant is assessed, and the determination of the ultimate design capacity of the entire network is verified through the use of the proposed new terminal station equipment. The potential upgrade supplier will seek wet plant system data thereafter conduct calculations and simulations for the fibre characteristics i.e. attenuation, chromatic dispersion, polarisation mode dispersion
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and non-linear deficiencies, repeater characteristics such as noise figure, bandwidth, quantity, output power. With the fibre and repeater characteristics of the network, the potential upgrade supplier can forecast the performance of the wet plant with the newer terminal equipment (this relates to the SLTE) (Frisch july,2010, Anderson 2004)
2.7.4.1. Actual network measurements
Following simulations and analysis of the system capability based on the data gathered from the system owners, the potential upgrade supplier will then endeavour a practical test on certain parts of the system (to allow for less traffic disruptions) to verify the achievability of the upgrade. The field trials duration ranges between five to ten days (Anderson 2004). This field trial network measurements give an indication to the potential upgrade supplier as to what capacity upgrade can be achieved (Frisch july,2010).
2.7.4.2. Submerged plant age
The rate of degradation of the wet plant is vital as it cannot be determined by the field trial network tests, however the estimates can be made based on the comparison of the original system commissioning results and the current system performance as verified by the potential system upgrade supplier (Anderson 2004)
2.7.5. Guarantees of ultimate capacity
The upgrade supplier will be required by the system owner to provide warranty of the new SLTE/SIE performance on the entire network including the wet plant portion (Anderson 2004, Pirio 2013).
2.7.6. Wet plant warrantees
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The upgrade supplier of the terminal station equipment i.e. SLTE/SIE must warrant that the new terminal station to be installed will not damage the existing wet/submerged plant of the network.
2.7.7. Operations and Maintenance
With the new installation of terminal equipment at differing cable landing stations, integration of the network management system of the new terminal station to that of the wet/submerged plant is vital in ensuring system functionality, hence it is important to establish key responsibilities regarding the maintenance of the system between system owner, original system supplier and upgrade supplier (Pirio 2013). The operations and maintenance costs remain the same following an upgrade as these costs are fixed and pertain to the wet plant which remains unchanged throughout the upgrade process. Some of operations and maintenance costs and their effects are listed below (West, Dawe 2013):
Cable maintenance agreement costs – this relate to the wet plant and they are not affected by terminal station upgrades, Maintenance authority costs – relates to land cable maintenance and are not affected by the terminal station upgrades, Station personnel - remains unchanged following a terminal station upgrade, as the same personnel gets trained on the new equipment, Equipment footprint – the footprint of the new equipment is smaller and the power consumption also is reduced, hence more space is available for other uses.
2.7.8. Upgrade capital expenditure Cost
The economic case of upgrading an existing undersea fibre optic cable system is an attractive one, given that the existing system capacity can be increased by means of terminal station equipment upgrades only (Summers, Crochet et al. 2013). Knowingly that the management of an existing undersea fibre optic cable system is under consortium arrangement, capital costs for the terminal station is raised within the consortia in which parties wanting to participate in the upgrade process pay the
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capital costs for the new equipment on a “cost causer equals cost payer” principle, that is to say that not all members of the consortium may require an upgrade to their capacity, so only those members seeking an upgrade will be affected (West, Dawe 2013). Replacement costs of 10Gbps wavelengths to higher bit rates such 40Gbps or 100Gbps is shared amongst the upgrade parties and is included in the capital costs (West, Dawe 2013).
2.7.9. Upgrading to 40 & 100 Gbps per wavelength/channel
Capacity upgrades allows for installation of new equipment at easy to access locations at the cable landing stations, and by avoiding the deployments of a new wet plant saves capital and time. When there is a spectrum is available on an existing undersea fibre optic cable system, new wavelengths at either 40 or 100 Gbps can be added, however if the cable system is at its maximum channel count, the existing 10Gbps channels will have to be replaced with new channels at a rate of 40Gbps or 100Gbps. This is achieved by removing existing 10Gbps transponder cards with those at 40 or 100Gbps transponder cards (Hansen July, 2010). This ability to remove low capacity transponder cards with those at a high capacity is proving quite beneficial as it saves capital investment in new cable systems (Hansen July, 2010).
2.8. Summary
The chapter gave an overview of the composition of the undersea optic fibre cable system from the submerged plant to the dry plant, it gave details of the process undertaken when constructing and implementing an undersea optic fibre cable system from concept through the utilization phases, moreover, the upgrading of existing cable system process was further highlighted. The next chapter focuses on the research methodology followed in order to answer the research questions.
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Chapter 3: Research Methodology
3.1. Introduction
In this chapter, the research methodology adopted will be explored, further, the data gathering and collection methods techniques will be looked at, and the research questionnaire design.
Chapter 1 presented the research topic in which the objective was to answer the following research questions:
1. What are the logistical activities conducted for the new build versus upgraded undersea optic fibre cable system? 2. What are the timelines/lead times for the implementation of the new build versus upgraded undersea optic cable system? 3. What is the effectiveness of upgrading the existing undersea optic fibre cable systems which are either congested or near design capacity, as opposed to building new undersea optic fibre cables? 4. What are the key enablers of extending the initial ultimate design capacity of an existing undersea cable system beyond its initial design? 5. What are the commercial benefits/drawbacks involved in upgrading existing undersea communication cable systems compared to new-built cable systems?
Chapter 2 Literature review laid a benchmark in which to address the research questions. Chapter 3 addresses the methodology in which the research questions are going to be addressed by means of a questionnaire survey.
3.2. Research Methodology
Research methodology is a way to systematically solve the research problem (Kothari 2004). The research method selected is that of a questionnaire survey as it makes it simple to quantify the research findings. The research questionnaire method is based on the self-administered questionnaire; this type of questionnaire enables the respondents to complete the questionnaire without the interviewer interference in the process of data collection. A self-administered questionnaire is well suited for this research given the geographical locations of the sampled population in which information is to be gathered. The questionnaire will be distributed to WACS, S3WS,
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EASSy and EIG cable systems which are owned by a consortium of telecoms companies. These mentioned cable systems span the African continent and provision international network connectivity between Africa and the rest of the world.
3.3.Research design
A research design is a plan, structure and strategy of investigation in order to obtain answers to research questions or problems. The plan is a programme of the research. It includes an outline of what the investigator will do from writing the hypothesis and their operational implications to the final analysis of data (Kumar 2011). The objective of the questionnaire is to conduct a trade-off study of a new build versus upgraded existing undersea optic fibre cable system from 10Gbps to 40/100Gbps channel rates than to constructing a new cable system operating at new rates of 40 or 100Gpbs, the cable systems (the survey participants) that are going to be looked are: WACS, S3W, EASSy and EIG as they are servicing the African continent and are operated/operating at bit rates of 10Gbps. A brief overview of each cable system is given below, members of these cables will form the basis of the population of the research questionnaire, in total 135 participants were emailed with the questionnaire for completion. The Procurement group deals with the procurement activities, initial concept, building the case, system supply contract, implementation phase and the handover of to the operations & maintenance group of the undersea fibre optic cable system, hence the preferred participants will provide reliable information concerning the system procurement activities as they are at the forefront of the proceedings and provides feedback to all other groups and committees.
West Africa Cable System (WACS)
WACS is an undersea fibre cable linking South Africa with the United Kingdom along the western African coast with total span length of about 16000Km. The ready for service date was May 2012, with a design capacity of 5.12 Tbps based on the 10Gbps technology. The system cost was $650 million. The system owners are comprised of 17 telecom carriers. The system supplier of was Alcatel-Lucent Submarine Networks.
Upgrade Plan
Huawei Marine Networks (Huawei Marine), a global submarine network provider, has revealed that it has completed upgrades on the section from South Africa to Portugal
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and Portugal to United Kingdom of the West Africa Cable System (WACS) using Huawei Marine’s 100G transmission solution. This upgrade has increased the system capacity and at the time of compiling this report the total capacity was unknown.
SAT3/WASC (S3W)
The ready for service date of the SAT3/WAASC was reached on 2002, the equipage on SAT3/WASC is 340Gbps with the total span being 14,350Km with a design capacity of 800Gbps. The system supplier is Alcatel-Lucent Networks. This system given its age is a candidate for an upgrade beyond its design capacity.
Upgrade
SAT-3/WASC/SAFE Parties and Alcatel-Lucent have completed the fourth upgrade of the SAT-3/WASC undersea cable system, which went live in 2014. This latest upgrade has doubled the current system capacity, further positioning SAT-3/WASC as a leading submarine cable facility on the Sub-Saharan African coastline. Operating at 40 Gbit/s, the system has landings in South Africa, Angola, Gabon, Cameroon, Nigeria, Benin, Ghana, Cote d’Ivoire, Senegal, Spain and Portugal. The SAT-3/WASC cable system was upgraded from 420 Gbit/s to 920 Gbit/s in the northern segments, north of Ghana, and from 340 Gbit/s to 800Gbit/s in the southern segments. Overall, this fourth upgrade enables a sevenfold increase in SAT- 3/WASC’s original design capacity through the use of Alcatel-Lucent’s advanced coherent technology.
East Africa Submarine System (EASSy)
The ready for service date for the EASSy cable was in February 2010. The system had an initial equipage of 30Gbps with the design capacity of 10Tbps and a total system length of 9,900Km. The system cost was $263,000,000. And the system supplier was Alcatel-Lucent Submarine Networks.
Upgrade
Alcatel-Lucent is to upgrade the EASSy submarine cable system, one of the largest and most modern systems serving Africa, with the deployment of the latest 100 gigabit-per-second (Gbit/s) technology. Alcatel-Lucent‘s 100G technology will enable the system to ultimately carry capacity in excess of 10Tbit/s, further complementing its ability to carry high volumes of data capacity on the EASSy system.
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EASSy is owned and operated by a group of 17 African and international shareholders – all telecommunications operators and service providers. The landings are in Sudan to South Africa, via Djibouti, Kenya, Tanzania, Madagascar, Comores and Mozambique. Landings are located in Port Sudan, Djibouti (Djibouti), Mombasa (Kenya), Dar Es Salaam (Tanzania), Moroni (Comores), Toliary (Madagascar), Maputo (Mozambique) and Mtunzini (South Africa).
Europe India Gateway (EIG)
EIG is a cable system linking the UK with India via the Mediterranean. The ready for service date of the Europe India Gateway (EIG) was achieved on February 2011.The cable system has a design capacity of 3.84Tbps measured in 10Gbps wave technology. The system cost was $700,000,000 with a length of 15,000,000Km. The system owners are comprised of 18 telecom carriers. The system suppliers were both Alcatel-lucent Submarine Networks and TE-Subcom.
Upgrade
System upgrader is Ciena with 100Gbps wavelength technology. Ciena is providing EIG an upgrade that will enable a flexible supply of network capacity.
It is clear that the dominant system supplier on the African continent is Alcatel-Lucent Submarine Network and such the research questions will be distributed to the system suppliers also, to ascertain the rate at which new systems are constructed or upgraded. The abovementioned cable system based on a consortium model as mentioned in section 2.6.3.1
3.3.1. The Questionnaire survey
A questionnaire is a written list of questions, the answers to which are logged by respondents (Kumar 2011). In a questionnaire respondents read the questions, interpret what is expected and then write down the answers.
In a questionnaire there is no one to explain the meaning of questions to respondents; hence it is important that the questions are clear and easy to understand. Likewise, the layout of a questionnaire should be such that it is easy to read and the sequence of questions should be easy to follow. A questionnaire should be developed in an interactive style. This means respondents should feel as if someone is talking to them. (Kothari 2004, Kumar 2011, Welman, Kauger et al. 2012). The type of questionnaire utilised in this research is that of mailed
54 questionnaire. The mailed questionnaire – is the common approach to collecting information by sending the questionnaire to prospective respondents via email (Kumar 2011). A mailed questionnaire must be accompanied by a covering letter. One of the shortcomings with this method is the low response rate (Kumar 2011). In the case of an extremely low response rate, the findings have very limited applicability to the population studied. The pros and cons of the questionnaire is tabled below:
No Pros of a questionnaire No Cons of a questionnaire 1 It is inexpensive - Particularly when it 1 Response rate is low. is administered collectively to a study population, it is an extremely inexpensive method of data collection. 2 It is anonymously issued - In some 2 There is a self-selecting bias. Not situations where sensitive questions everyone who receives a are asked it helps to increase the questionnaire returns it, so there is likelihood of obtaining accurate a self-selecting bias. information. 3 Opportunity to clarify issues is lacking. 4 The response to a question may be influenced by the response to other questions. 5 It is possible to consult others. With mailed questionnaires respondents may consult other people before responding. 6 A response cannot be supplemented with other information. Table 4 Pros and cons
The questionnaire was designed so as not to take long to complete. The questionnaire is comprised of three sections. The first section “Section A” seeks to establish the background of the organisational representatives within the consortium model and the experience in years the members have given the high skill content required in the field. The second section “Section B” aims to gather information on the construction of undersea fibre optic cable systems. The questions are sub- divided into five sub-categories which are: general, project concept phase, project
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development phase, construction/implementation phase and the permitting process questions. The third section “Section C” gathers information on the upgrade of existing undersea fibre optic systems the section has two sub-categories namely: upgrade questions and the permitting process questions.
The questionnaire uses the 5 point likert scale for section B and C, to capture the professional opinion and views of the participants with respect to the upgrading existing undersea cable system against erecting a new system.
3.4.Population and Sampling technique
The population is inclusive of the total collection of all units of analysis about which the researcher wishes to make specific conclusions (Welman, Kauger et al. 2012). As mentioned above, the population used is the consortium of cables that is WACS, SAT3/WASC, EASSy and EIG which service the African continent. The consortium model is multi-disciplinary and is dispersed across the world with most of the telecommunication carriers based on the African continent, and followed by Europe and Asia. South African telecom companies (i.e. MTN, Vodacom, Telkom, Neotel and Broadband Infraco) partake in these consortium arrangements. The survey was distributed via email given the geographical locations of the participants there was a total of 135 participants emailed most of which belong to the procurement group. Sampling refers to the process of selecting a portion of the population and using it as the object of the study. There are two types of sampling which are: probability sampling and non-probability sampling. In this research, probability sampling is utilised. A random sample of the Consortium members varying from managing committee, procurement group, Network administrators etc. (as per the C&MA structure) were surveyed for the purpose of this research and to capture a diverse representation. The following population breakdown was surveyed:
Cable WACS EASSY SAT3/WASC EIG Suppliers Consortium
No. of 34 22 36 34 9 participant
Table 5 expected participants per cable system
Overall the number of the expected participants in the survey were 135 with an anticipated response number estimated a 20.
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3.5.Data collection and analysis
There are two main approaches to gathering information about a situation or problem. When one undertakes a research study, one need to collect the required information, however, sometimes the information required is already available and need only be extracted. Based upon these broad approaches to information gathering, data can be Categorised as: primary and secondary data, i.e. information from primary data is said to be collected from primary sources e.g. find out the attitudes of people towards a certain fast food chain store, customer satisfaction and that of secondary data from secondary sources e.g. refers to data that is already in existence and can be used such as medical records, textbooks, articles and journals. The figure below illustrates the data collection methods.
Figure 28 Data collection methods
3.6.Summary
The chapter gave an outline of the research methodology adopted, the research design which was inclusive of the research questionnaire, the population & sampling technique and the data collection and analysis.
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Chapter 4: Research Findings and Discussions
4.1. Introduction
The objective of this chapter is to present the findings of the questionnaire: “Trade-off study of a new build versus an upgraded existing undersea optic fibre cable system Questionnaires” and based on the data collected from the participants and provide answers to the research questions.
4.2. Findings and interpretation
4.2.1. Section A: Background Information
The objective of this section was to ensure the provision of background information of the respondents which assisted the author to complete the study.
4.2.1.1. Which work group or sub-committee best describes your job position?
The figure indicates that respondents representing the procurement group (PG) are 51.9%, followed 22.2% respondents representing the operations and maintenance sub-committee (O&MSC), 11.1% represented by other, and 3.7% represented by four sub-committee i.e. Financial &Commercial Sub-Committee (F&CSC), Central Billing Party (CBP), Network Administrator (NA) and System Supplier/Upgrader. The PG has majority of the representatives and will have a positive effect on the research
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given that the PG is at the forefront of system procurement and system upgrades throughout the lifespan of the undersea fibre optic cable systems.
4.2.1.2. Indicate Work experience?
The figure clearly indicates that the 63% of respondents have experience ranging between 5-9 years and 11.1% respondents with experience of 10 or greater years of service, these two categories provided valuable input to the study. The least group with less experience in the range of 1-4 years accounted for 25.9% share of representation.
Section A provided valuable information regarding the background of the participants, and has assisted in the completion of the study.
4.2.2. Section B: Undersea Cable New built questions
This section covers activities in the construction of undersea optic fibre cable system. The results of the questionnaire survey are provided herewith. General: 4.2.2.1. The main drivers of constructing new undersea optic cable system are: 1 Capacity demand - to meet projected growth on an existing or new cable route; 2 Connectivity demands - to new areas which have not been serviced previously.
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66.7% of the respondents were in agreement with the statement, whilst 29.6% fully agreed and 3.7% were neutral. The results are indicative that a new undersea cable system is conceived to satisfy the capacity demand and connectivity demand.
4.2.2.2. The construction of a long haul (cable lengths >9000km) undersea fibre optic cable system is capital expenditure intensive, costing greater than $300M
70.4% of the respondents agreed and 18.5% fully agreed and 11.5% were neutral, there were no disagreements. This shows that undersea cable system is expensive and requires considerable investments to initiate.
4.2.2.3. The most prevalent ownership structure is the consortium model
44.4% of the respondents agreed and 44.4% fully agreed with the statement while 11.1% were neutral. Although there are other ownership structures, the consortium structure is the most preferred by telecoms carriers in the design, construction and maintenance of cable systems so as to share responsibilities.
4.2.2.4. The investment amount covers the lifecycle costs i.e. project development, system supply, landing party establishment, NOC and O&M costs
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66.7% and 18.5% of the respondents agreed and fully agreed respectively while 7.4% were neutral and 7.4% were in disagreement with the statement. The disagreement likely pertains to the investment amount covering the O&M costs throughout the lifespan.
Project Concept phase - The below following activities are carried out during this phase:
4.2.2.5. The analysis of the Market demand, and revenue potential, and the feasibility study of the new cable system is conducted as well as the comparison and selection of the preferred system configuration
59.3% of the respondents agreed, 25.9% fully agreed and 14.8% were neutral. This typically this must be done in the concept phase to determine the viability of the system overall.
4.2.2.6. The MOUs partners and landing parties are identified and secured
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59.3% of the respondents agreed, 3.7% respondents fully agreed, 29.6% of the respondents were neutral and 7.4% of the respondents fully disagreed. The potential parties establishes the need for the cable and sign a MOU, however the landing parties can be identified at later stages, hence some respondents will not agree with the statement.
4.2.2.7. The initial financing is secured from the participating members
63% of respondents agreed, while 11.1% fully agreed, 14.8% were neutral, 3.7% disagreed and 7.4% fully disagreed. Overall respondents were in agreement with the statement, though the finance amounts can be agreed upon by the consortium parties, the dates of securing the funds will differ from one party to another with the commonality being the agreed deadline.
4.2.2.8. The business model and plan is developed
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The responses were: 66.7% agreed, 14.8% fully agreed, 14.8% were neutral and 3.7% fully disagreed. The business case establishes the objectives of starting the project, provides high level system design features, expected utilization period, hence the overall agreement by the respondents.
4.2.2.9. The duration of this phase ranges between 4-6 months to conclude
Responses were: 40.7% in agreement, 7.4% fully agreed, 25.9% neutral, 22.2% in disagreement and 3.7% fully disagreed. Due to variable elements in this phase i.e. the number of potential cable owners, system length, investment amounts etc. there could be disagreements in plans and delays will occur.
Project Development phase; Following activities are carried out:
4.2.2.10. The Construction & Maintenance Agreement is developed
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Responses were 59.3% agreed, 29.6% fully agreed, 3.7% neutral and 7.4% disagreed. The majority of the participants agreed that the C&MA is developed in this phase whilst 3.7% minority were in disagreement. The C&MA administers the relations between consortium members and hence must be done.
4.2.2.11. The technical & commercial requirements (forming part of the ITT) of cable system are developed
The participants responses were: 55.6% agreed, 33.3% fully agreed, 7.4% neutral and 3.7% disagreed. In order to issue an invitation to tender, it is vital that these documents be done prior to system procurement.
4.2.2.12. The Issuance of the Intend To Tender (ITT) to the preferred system suppliers
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The responses were: 63% in agreement, 22.2% fully agreed, 11.1% in neutrality and 3.7% disagreed. The undersea cable system suppliers are limited in number, there are a total of 7 suppliers of which some serve specific regions only, hence the ITT is issued to all or a select few that the system supplier is conversant with.
4.2.2.13. The procurement of the undersea cable system is a competitive exercise: (includes RFP, tender issuance and receipts, adjudication, selection of supplier and award contract to preferred supplier)
The responses were: 51.9% agreed, 40.7% fully agreed, 3.7% disagreed and 3.7% fully agreed. The overwhelming majority of the respondents were agreed with the statement. It is seldom that the a sole supplier is chosen for a new system instead a tender process is followed to included interested suppliers and the solution which yearns best value for cost, time and quality is selected.
4.2.2.14. The landing stations and backhaul agreements are secured
The responses were: 70.4% agreed, 14.8% fully agreed, 11.1% neutral and 3.7% disagreed. The undersea fibre cable has to be terminated in landing cable stations which are already in existence or new built stations, whereas the backhaul agreements refers to the transmission facilities which land-based which
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connects/interfaces the undersea network to the terrestrial network. Hence are most respondents were in agreement.
4.2.2.15. Conduct pre-contract supply activities i.e. desktop study and permitting
The responses were: 77.8% agrees, 7.4% fully agreed, 11.1% neutral and 3.7% disagreed. Pre-contract supply activities are necessary in order to assist in the selection and verification of cable landing sites, identification of the cable marine route, assess risks for the proposed route so forth. Hence pre-contract activities are prerequisites to the main supply contract, as such most respondents agreed with the statement.
4.2.2.16. The typical phase duration is 6 - 12 months
The responses were: 51.9% agreed, 14.8% fully agreed, 22.2% in neutral, 7.4% disagreed and 3.7% fully disagreed. The duration is subject to delays, due to every project being unique in design, hence minority of the respondents were in disagreement, and nonetheless overall the majority agreed that the typical duration is a year.
Construction/Implementation phase; Following activities are carried out:
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4.2.2.17. Contract negotiation and coming into force with the preferred supplier
The responses were: 74.1% agreed, 18.5% fully agree, 7.4% neutral. Once the preferred supplier is identified, the terms of contract are negotiated prior to contract award and signature. Given the responses, this is indicative that this is step occurs all the time, and is to the benefit of both the purchaser and supplier.
4.2.2.18. Obtain permitting (Licenses and permits) and regulatory approvals( system purchaser) such as: operator license, cable landing license, new cable station building permits, pipeline crossing agreements, environmental permits.
Responses were: 70.4% agreed, 18.5% fully agreed, 11.1% neutral. As part of the permit process, the system purchaser is required to obtain the related permits prior to commencement of system installation work.
4.2.2.19. Obtain permitting (Licenses and permits) and regulatory approvals (System supplier) vessel licenses, permits to work in countries, personnel visa
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Responses were: 74.1% agreed, 18.5% fully agreed, 7.4% neutral. In similar to the system purchaser, the supplier is also required to fulfil permit requirement in order to start with the work.
4.2.2.20. Wet and Dry plant manufacture: Quality Assurance and acceptance
Responses were: 77.8% agreed, 18.5% fully agreed and 3.7% fully disagreed. Overwhelming majority of the respondents agreed with the statement. Activities such as factory acceptance testing and acceptance of the submerged and terminal equipment are carried out prior to installations to ensure that specifications are met.
4.2.2.21. Landing stations preparation (includes building a new ones if not existing)
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Responses were: 70.4% agreed, 22.2% fully agreed and 7.4% were neutral. The cable landing stations will have to be constructed in some landing points whereas some landing points will have an existing cable landing stations and space will be made to accommodate extra terminal equipment.
4.2.2.22. Customs and duties payments and settlement of equipment in the respective countries
Responses were: 55.6% agreed, 25.9% fully agreed, 11.1% neutral, 3.7% disagreed and 3.7% fully disagreed. Customs and duties (taxation) are imposed on the equipment that is destined to respective cable landing stations in differing countries and have different rates per country. The costs are borne by the system purchasers. The respondents are in agreement that the costs must be settled as equipment arrives in country.
4.2.2.23. System (wet & dry) installation oversight
Responses were: 74.1% agreed, 14.8% fully agreed, 7.4% neutral and 3.7% fully disagreed. During the installation activities the system purchasers will have a representative to have an oversight of supplier’s activities. The responses indicate an overall agreement with the statement.
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4.2.2.24. Site test, commissioning and acceptance oversight
Responses were: 70.4% agreed, 22.2% fully agreed, 3.7% neutral and 3.7% fully disagreed. The majority of the respondents are in agreement with the statement. The system purchaser needs to ensure that there is oversight over the supplier activities.
4.2.2.25. System ready for provisional acceptance
Responses were: 66.7% agreed, 25.9% fully agree, 3.7% neutral and 3.7%. This is the point whereby the cable system is accepted by the system purchasers from the supplier, following all the necessary tests being successful.
4.2.2.26. The construction of an undersea cable system takes approx. 12-24 months to complete
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Responses were: 66.7% agreed, 14.8% fully agreed, 7.4% neutral, 7.4% disagree and 3.7% fully disagree. Ideally the duration will take about 2 years to complete the implementations, only delays hamper the plan of work to completion. The majority of the respondents agreed that it does take two years to complete.
4.2.2.27. Major delays are influenced by: cable stations completion delays and integration of terrestrial routes
Responses were: 55.6% agreed, 18.5% fully agreed, 11.1% neutral, 7.4% disagree and 7.4% full disagree. The respondents agree that major delays are due to the cable station delays however the minority 14.8% are not of that view.
Permitting Activities
4.2.2.28. Permits are one of the challenging features of the undersea optic fibre cable project as the precise scope of permitting exercise is unknown until later in the project stages due to the amount of multiple types of permits involved.
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Responses were: 81.5% agreed, 3.7% fully agreed, 7.4% neutral, 7.4% fully disagree. Majority of respondents agreed with the statement, this testifies the cumbersome characteristics of permitting more especially on new cable routes or new countries that are new in the industry.
4.2.2.29. Permitting delays can cause a ripple effect to the implementation schedule, shipping schedules and the overall statement of work of the project
Responses were: 66.7% agreed, 11.1% fully agreed, 7.4% neutral, 3.7% disagreed and 11.1% fully disagreed. These responses testify the adverse effect the delays in the permit process can have in the completion of the undersea cable project overall.
4.2.2.30. The main permit risks are those relating to permits in the maritime (submerged plant) activities and cable landing station construction/activities
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Responses were: 66.7% agreed, 14.8% fully agreed, 7.4% neutral 11.1% fully disagreed. The submerged plant has the lion’s share of the implementation of the entire system given its share magnitude and geographic coverage and followed by cable landing station activities.
4.2.3. Section C: Upgrade Questions 4.2.3.1. Upgrade of an undersea cable systems extends the design life of undersea fibre cable system and subsequently reduces the cost of bandwidth
Responses were: 59.3% agreed, 18.5% fully agreed, 14.8% neutral, 3.7% disagreed, 3.7% fully disagreed. Majority of the respondents tends to agree that the lifespan of the cable can be extended due rejuvenation of the terminal equipment and due to increased capacity the overall cost of bandwidth reduces.
4.2.3.2. Upgrades are faster, simpler and economical than new cable system installation
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Responses were: 59.3% agreed, 33.3% fully agreed, 7.4% neutral. Majority of the respondents were in agreement with the statement, this illustrates the high adoption of upgrade strategies in order to reap the economic benefits with less investment amounts compared to new built cables. Hence if there is an existing cable, it is best to consider upgrades first before new built consideration.
4.2.3.3. Upgrade costs focus chiefly on the terminal equipment capital cost based on the cost causer equals cost payer(i.e. costs are incurred only by parties taking part in the upgrade process), this is inclusive of the replacing the existing terminal equipment
Responses were: 63% agreed, 18.5% fully agreed, 7.4% neutral and 11.1% disagreed. An overwhelming majority of 22 respondents agreed whilst 3 disagreed. This is the main reason why upgrade are becoming or have become a common occurrence due to only the terminal equipment being subject to changes only whilst the submerged plant is expensive to construct remains unchanged.
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4.2.3.4. Upgrade enablers are as a result of improvement to the following: spectral efficiency, coherent detection, modulation formats and forward error detection
Responses were: 70.4% agreed, 18.5% fully agreed, 7.4% neutral and 3.7% disagreed. These enablers have been and are continuing to be a revelation in the upgrade segment and hence majority of the respondents are in agreement with the statement.
4.2.3.5. The Upgrade activities entail the replacement of the terminal station equipment i.e. (SLTE & SIE or SLTE only) with new terminal equipment
Responses were: 48.1% agreed, 22.2% fully agreed, 14.8% neutral, 11.1% disagreed and 3.7% fully disagreed. The system upgrades include terminal equipment replacement and thereby ensuring high capacity increases with the submerged plant not changed.
4.2.3.6. The upgrade process is less capital expenditure intensive and ranges between $5-$20M depending on the cable length and segments to be upgraded
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Responses were: 51.9% agreed, 14.8% fully agreed, 22.2% neutral 7.4% disagree and 3.7% fully disagreed. The primary objective of cable owners is to maximise the value of the undersea fibre optic cable system, looking the stated upgrade costs, it becomes evident that terminal equipment costs are relatively low when compared with the cost of an undersea cable built( the bulk of the costs are attributed to the submerged plant). Hence system upgrades increases commercial life of the system.
4.2.3.7. The Upgrade funds are raised within the consortium with interested parties raising funds internally (this makes funds readily available)
Responses were: 70.4% agreed, 11.1% fully agreed, 11.1% neutral and 7.4% disagreed. The funds can easily be raised within the consortium which makes it easy to avail funding when compared to sourcing out through the financial sector.
4.2.3.8. An Undersea Fibre cable system characterisation is essential and is done through field trials in order to establish the degree of upgradability of the existing system
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Responses were: 59.3% agreed, 22.2% fully agreed and 18.5% neutral. From the responses it is clear that there is an agreement on the statement. The system characterisation is necessary in order to ascertain the extent of system upgradability.
4.2.3.9. The upgrade supplier is required by the system owner to provide warranty of the new SLTE/SIE performance on the entire network including the wet plant portion following a system upgrade
Responses were: 70.4% agreed, 18.5% fully agreed 3.7% neutral and 7.4% fully disagree. After successful system characterisation, the system upgrader needs to demonstrate the upgraded system will work seamlessly and integrate with the entire network system. Thus, most respondents agree with the statement.
4.2.3.10. The operations and maintenance costs remain the same following an upgrade as these costs are fixed and pertain to the wet plant which remains unchanged throughout the upgrade process
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Responses were: 59.3% agreed, 14.8% neutral and 25.9% disagree. 16 respondents agreed and 7 disagreed with the statement. The bulk of the operations and maintenance costs are tied up on the submerged plant, the terminal operations and maintenance costs are expected to lessen given the latest equipment has less footprint and energy efficient.
4.2.3.11. By issuing an invitation to tender (ITT) for the upgrade procurement through a competitive bidding, economical costs can be attained
Responses were: 48.1% agreed, 18.5% fully agreed, 18.5% neutral, 11.1% disagree and 3.7% fully disagree. Majority 18 respondents agrees whilst minority 4 respondents disagrees. The main objective of open tender is to get the best value for money solution, however at times the results of the invitation to tender yields results which tends to suggest that a sole procurement should have been done to avoid the costly and time consuming exercise of tender evaluations, thus the minority of respondents are in disagreement.
4.2.3.12. Major delays are encountered mostly during customs clearances and equipment transportation to landing stations and getting the cable landing station ready for new terminal equipment installation
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Responses were: 63% agreed, 25.9% fully agreed, 7.4% neutral and 3.7% disagreed. Overall most respondents agreed, the customs clearances and equipment transportation is a common factor between new built system and an upgraded system, however the logistical activities and the deliverables are relatively less for upgraded system.
4.2.3.13. The upgrade supplier of the terminal station equipment i.e. SLTE/SIE must warrant that the new terminal station to be installed will not damage the existing submerged plant of the network.
Responses were: 74.1% agreed, 14.8% fully agreed, 7.4% neutral and 3.7% fully disagreed. Following an upgrade, the entire network must operate smoothly and with no network disruptions after commissioning.
4.2.3.14. During the upgrading exercise it is vital that there be an operational optimisation plans, so as not to disrupt commercial traffic on the network, therefore optimum operational windows in which to carry out the work need to be planned and possibly done during periods where there is less traffic on the system network, this is done typically during late nights.
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Responses were: 74.1% agreed and 25.9% fully agreed. All respondents agreed with the statement. The cable system still needs to be commercially viable during the upgrade, hence high customer satisfaction levels are to be maintained.
4.2.3.15. The Upgrade duration for large consortium cable span greater than 8000km ranges between 6 -12 months to implement
Responses were: 63% agreed, 14.8% fully agreed, 18.5% neutral and 3.7% disagreed. Majority of the respondents agreed with the range stipulated. The upgrades are quick to implement and have less duration and delays when compared to the new built implementation times
Permitting Activities for System upgrades
4.2.3.16. There is virtually no permitting issues when compared to building the cable system from the beginning, the only issue of concern being getting the supplier's personnel into the particular country
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Responses were: 66.7% agreed, 18.5% fully agreed, 7.4% neutral and 7.4% disagreed. The respondents are of the view that the permit process is virtually non-existent when compared with new built cables, this obviously due to the fact that the system infrastructure is already in place with existing permits.
4.3. Research questions answers
1. What are the logistical activities conducted for the new build versus upgraded undersea optic fibre cable system?
RQ No New Built undersea Fibre RQ No Upgraded Existing Undersea Optic cable System Fibre Optic System
4.2.2.5 The analysis of the Market 4.2.3.5 The Upgrade activities entail the demand, and revenue potential, replacement of the terminal station and the feasibility study of the equipment i.e. (SLTE & SIE or new cable system is conducted SLTE only) with new terminal as well as the comparison and equipment selection of the preferred system configuration
4.2.2.6 The MOUs partners and landing 4.2.3.8 An Undersea Fibre cable system parties are identified and characterisation is essential and is secured done through field trials in order to establish the degree of upgradability of the existing system
4.2.2.8 The business model and plan is 4.2.3.9 The upgrade supplier is required by
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developed the system owner to provide warranty of the new SLTE/SIE performance on the entire network including the wet plant portion following a system upgrade
4.2.2.10 The Construction & Maintenance 4.2.3.11 By issuing an invitation to tender Agreement is developed (ITT) for the upgrade procurement through a competitive bidding, economical costs can be attained
4.2.2.11 The technical & commercial 4.2.3.12 Major delays are encountered requirements (forming part of the mostly during customs clearances ITT) of cable system are and equipment transportation to developed landing stations and getting the cable landing station ready for new terminal equipment installation
4.2.2.12 The Issuance of the Intend To 4.2.3.13 The upgrade supplier of the terminal Tender (ITT) to the preferred station equipment i.e. SLTE/SIE system suppliers must warrant that the new terminal station to be installed will not damage the existing submerged plant of the network.
4.2.2.13 The procurement of the 4.2.3.14 During the upgrading exercise it is undersea cable system is a vital that there be an operational competitive exercise: (includes optimisation plans, so as not to RFP, tender issuance and disrupt commercial traffic on the receipts, adjudication, selection network, therefore optimum of supplier and award contract to operational windows in which to preferred supplier) carry out the work need to be planned and possibly done during periods where there is less traffic on the system network, this is done typically during late nights.
4.2.2.14 The landing stations and 4.2.3.16 There is virtually no permitting
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backhaul agreements are issues when compared to building secured the cable system from the beginning, the only issue of concern being getting the supplier's personnel into the particular country
4.2.2.15 Conduct pre-contract supply activities i.e. desktop study and permitting
4.2.2.17 Contract negotiation and coming into force with the preferred supplier
4.2.2.18 Obtain permitting (Licenses and permits) and regulatory approvals( system purchaser) such as: operator license, cable landing license, new cable station building permits, pipeline crossing agreements, environmental permits.
4.2.2.19 Obtain permitting (Licenses and permits) and regulatory approvals (System supplier) vessel licenses, permits to work in countries, personnel visa
4.2.2.20 Wet and Dry plant manufacture: Quality Assurance and acceptance
4.2.2.21 Landing stations preparation (includes building a new ones if not existing)
4.2.2.22 Customs and duties payments and settlement of equipment in
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the respective countries
4.2.2.23 System (wet & dry) installation oversight
4.2.2.24 Site test, commissioning and acceptance oversight
4.2.2.25 System ready for provisional acceptance
4.2.2.28 Permits are one of the challenging features of the undersea optic fibre cable project as the precise scope of permitting exercise is unknown until later in the project stages due to the amount of multiple types of permits involved.
Typically, the undersea fibre optic cable system is supplied through a turnkey basis whereby the system supplier would provide the system design, supply of equipment, route survey, cable laying, and system commissioning, this process applies to both the new build and the upgrade process. An undersea optic fibre cable system has to undergo multiple steps prior to it being implemented successfully; this makes risk and project management key to implementing the processes. If any of the processes gets delayed, it can influence other processes which will effectively delay the overall project. Hence it becomes vital for both suppliers and purchasers of the system to manage the processes in order to achieve system completion on time as required. Some of the highlighted processes are: submerged plant (marine installation permit, cable manufacturing, repeater and system assembly), cable landing station (equipment manufacture, FAT, customs clearance & transportation), commissioning tests and acceptance tests of the system. From the tabled research questions it becomes apparent that the logistical activities of constructing an undersea optic fibre cable system are greater than those for carrying out a system upgrade. The construction of undersea cable system undergoes project phases from concept through to utilisation phase whereas the upgrade phase occurs during the operation of the system and is initiated by the increased capacity demand. This makes it easy for system upgrade
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2. What are the timelines/lead times for the implementation of the new build versus upgraded undersea optic cable system?
RQ No New Built undersea Fibre RQ No Upgraded Existing Undersea Optic cable System Fibre Optic System
4.2.2.9. Conceptual phase take a 4.2.3.15 The upgrade phase takes 6 -12 duration of 4 – 6 months to months to implement on long haul complete. systems of spanning over 8000km.
4.2.2.16 The project development phase 4.2.3.12 Major delays are encountered takes duration of 6 – 12 months during custom clearances and to complete. equipment transportation
4.2.2.26 The implementation phase takes duration of 12 -24 months to complete.
4.2.2.27 Major delays are influenced by cable stations completion and integration terrestrial routes
4.2.2.29 Permitting delays can cause a ripple effect to the implementation schedule, shipping schedules and the overall statement of work of the project
Overall to implement the system from concept to implementation phases takes about 22 – 42 which is approximately 2 – 4 years.
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It is clear that the construction of an undersea fibre optic cable system is a mammoth task and the time to completion is elongated. It is thus vital for system owners of existing system to consider as part of their decision making as to upgrade or procure an undersea cable system, to maximise the capacity of the existing cable system through capacity upgrades and only consider new cable system once they have exhausted the upgrade process alternatives. By managing the delays during the system implementation process the time frames can be achieved. For New build undersea cable system it is vital that the system is completed and delivered in the required time so as to maximise the effectiveness of the cable infrastructure investments. Hence the implementation plan needs to be adhered to, as any delays can impact the available resources such as manufacturing facility, Human resources, vessel availability, equipment shipment etc. overall the time frame to fund and build a new undersea optic fibre cable system is time consuming to cost effectively meet the required demand, however as a result of technological advancements in the terminal equipment, upgrades are more quick, taking less than a year to implement.
3. What is the effectiveness of upgrading the existing undersea optic fibre cable systems which are either congested or near design capacity, as opposed to building new undersea optic fibre cables?
RQ No New Built undersea Fibre Optic RQ No Upgraded Existing Undersea cable System Fibre Optic System
4.2.2.1 The main drivers of constructing 4.2.3.1 Upgrade of an undersea cable new undersea optic cable system systems extends the design life of are: 1 Capacity demand - to meet undersea fibre cable system and projected growth on an existing or subsequently reduces the cost of new cable route; 2 Connectivity bandwidth demands - to new areas which have not been serviced previously.
4.2.2.21 Landing stations preparation 4.2.3.2 Upgrades are faster, simpler and (includes building a new ones if economical than new cable system not existing) installation
4.2.2.22 Customs and duties payments 4.2.3.5 The Upgrade activities entail the and settlement of equipment in replacement of the terminal station
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the respective countries equipment i.e. (SLTE & SIE or SLTE only) with new terminal equipment
4.2.2.23 System (wet & dry) installation 4.2.3.8 An Undersea Fibre cable system oversight characterisation is essential and is done through field trials in order to establish the degree of upgradability of the existing system
4.2.2.24 Site test, commissioning and 4.2.3.9 The upgrade supplier is required by acceptance oversight the system owner to provide warranty of the new SLTE/SIE performance on the entire network including the wet plant portion following a system upgrade
4.2.2.25 System ready for provisional 4.2.3.10 The operations and maintenance acceptance costs remain the same following an upgrade as these costs are fixed and pertain to the wet plant which remains unchanged throughout the upgrade process
4.2.2.30 The main permit risks are those 4.2.3.11 By issuing an invitation to tender relating to permits in the maritime (ITT) for the upgrade procurement (submerged plant) activities and through a competitive bidding, cable landing station economical costs can be attained construction/activities
4.2.3.13 The upgrade supplier of the terminal station equipment i.e. SLTE/SIE must warrant that the new terminal station to be installed will not damage the existing submerged plant of the network.
4.2.3.14 During the upgrading exercise it is vital that there be an operational
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optimisation plans, so as not to disrupt commercial traffic on the network, therefore optimum operational windows in which to carry out the work need to be planned and possibly done during periods where there is less traffic on the system network, this is done typically during late nights.
4.2.3.16 There is virtually no permitting issues when compared to building the cable system from the beginning, the only issue of concern being getting the supplier's personnel into the particular country
The construction of a new undersea fibre optic cable system is a colossal project and takes time to complete with investment amounts of hundreds and hundreds of million dollars. For the system owners of existing undersea optic fibre cables, there exist options of either upgrading the system to higher capacity and thereby increasing the lifespan of the system or looking into the possibility of decommissioning the entire system and starting afresh in acquiring a new system. Given the processes undertaken to procure new built system, system owners will attempt by all means to upgrade their existing system instead of investing in a new system, as it is more effective to upgrade an existing system to high capacities at low investment amounts as opposed to building a new one. In order to effectively upgrade an existing undersea fibre optic cable system, it is required to be borne in mind that the technical challenges associated with bringing additional capacity differ between each generation of technology of the existing cable system and that design and modelling is required in order to optimise and upgrade the existing system to higher capacities.
4. What are the key enablers of extending the initial ultimate design capacity of an existing undersea cable system beyond its initial design?
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RQ Upgraded Existing Undersea Fibre Optic System No 4.2.3.4 Upgrade enablers are as a result of improvement to the following: spectral efficiency, coherent detection, modulation formats and forward error detection
The advent of the technological improvements in the spectral efficiency, modulation formats and forward error detection has had an impact on the expansion of capacity on the existing undersea fibre optic cable system so much so that the numbers of new builds have decreased. The undersea fibre optic cable system is designed for a lifespan of 25 years however during the course of operation, most cable system reach their design capacities way before they reach the stated design life cycle, limiting the economic life of the system, due to the key enablers, it has been found that the submerged plant remains unchanged however the terminal equipment changes, hence enabling a cable system to have a new expanded economic lifespan.
5. What are the commercial benefits/drawbacks involved in upgrading existing undersea communication cable systems compared to new-built cable systems?
RQ New Built undersea Fibre Optic RQ No Upgraded Existing Undersea No cable System Fibre Optic System
4.2.2.2 The construction of a long haul 4.2.3.1 Upgrade of an undersea cable (cable lengths >9000km) systems extends the design life of undersea fibre optic cable system undersea fibre cable system and is capital expenditure intensive, subsequently reduces the cost of costing greater than $300M bandwidth
4.2.2.3 The most prevalent ownership 4.2.3.3 Upgrade costs focus chiefly on the structure is the consortium model terminal equipment capital cost based on the cost causer equals cost payer(i.e. costs are incurred only by parties taking part in the upgrade process), this is inclusive of the replacing the existing terminal
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equipment
4.2.2.4 The investment amount covers 4.2.3.6 The upgrade process is less capital the lifecycle costs i.e. project expenditure intensive and ranges development, system supply, between $5-$20M depending on the landing party establishment, cable length and segments to be NOC and O&M costs upgraded
4.2.2.5 The analysis of the Market 4.2.3.7 The Upgrade funds are raised within demand, and revenue potential, the consortium with interested and the feasibility study of the parties raising funds internally (this new cable system is conducted makes funds readily available) as well as the comparison and selection of the preferred system configuration
4.2.2.7 The initial financing is secured 4.2.3.11 By issuing an invitation to tender from the participating members (ITT) for the upgrade procurement through a competitive bidding, economical costs can be attained
The investment amount of undersea fibre cable system is high, being a fraction of a billion dollars; it becomes difficult for a single purchaser to procure the system. However, if the cable system is purchased within a consortium, the investment amount becomes acceptable. There are several factors that make an economic case for system upgrade attractive, amongst them is the low level of the capital investment required, systems spanning lengths of (> 8000km) will cost less $20million making it extremely economical to upgrade than to lay a new system. The time delay between the securing of the capital of the new built system from the consortium members, and the system revenue generation takes time such the return on investment is not acceptable if the traffic on the cable system does not reach predicted levels whilst upgrades allow for incremental capacity growth based on the actual demand, which yields revenue opportunity. System upgrades defers key capital expense on new builds, which results in cash savings. Another benefit of the upgrade is that the overall the maintenance costs per unit bandwidth will be reduced due to the fact that most maintenance agreements mostly consider the system cable length, which does not change following an upgrade.
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4.4. Summary of the results
Based on the results and the discussions of the study, it has become clear that the upgrading of undersea optic fibre cable systems is more effective to implement than constructing a new entire system altogether. It has been indicated that the logistical activities and the lead times for implementation of upgrading a cable system are far lesser than that of new build cable system. Further, it was demonstrated that it was effective to upgrade existing cable systems as opposed to constructing new build cable systems given that the upgrade process concerns itself with the terminal plant equipment replacement as opposed to procuring the entire system. It was also indicated that the capital investments on an upgraded system were far favourable versus that of a new build. It was clearly validated that the key enablers (i.e. spectral efficiency, coherent detection, modulation formats and forward error detection) were instrumental in enabling the upgrade of existing cable systems.
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Chapter 5: Conclusions and recommendations
5.1. Conclusions
Continued investment in the undersea optic fibre cable systems is required in order to meet the increased demand for data content. This is achieved through investing in new undersea optic fibre cable systems or through upgrading systems that are already in existence to meet the increased demand.
The research considered a trade-off study of a new build versus an upgraded existing undersea optic fibre cable system. This was done by looking at the activities that are implemented in the undersea optic fibre cable system through the life cycle phases i.e. (concept, development, implementation and utilisation phases) and comparing with the activities that are done in order to implement an upgrade of the system thereby increasing the system capacity.
Construction an undersea optic fibre cable system is a lengthy process with many activities which must be accomplished in order to deliver the system in accordance to the stated specification. The construction of the entire system takes approximately three years to complete. This time is spent planning, developing and constructing the system. The key deliverables of the system are:
Feasibility studies and Financial analysis,
System configurations,
Identification of the system routes and landing points,
Development of Construction & Maintenance agreement,
Issuance and adjudication of tender documents,
Permitting and regulatory documents,
Dry and Wet plant manufacturing quality assurance,
Landing stations preparations and constructions,
System installation and commissioning.
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Major delays on construction of an undersea optic fibre cable system is experienced in the permitting and regulatory processes given the system having to land in differing countries with differing regulations. Delays also are experienced in during the construction of cable landing station in where they do not exist; also the manufacturing delays can have a significant delay on the timelines of the project delivery. The financing of undersea optic fibre cable system is done through the consortium comprised of telecoms carriers with a common objective of constructing and operating the system network.
In comparison to upgrading an existing system, the timelines are swift in relation to new build system; an upgrade can take five to twelve months to accomplish. Upgrading an existing system enable the owners to achieve a high system capacity at a low cost given that only the terminal station equipment get replaced. Further, no permits are required as these would have been done when the system was first installed (only visas for personnel entering a particular country are required). Delays can occur as a result of the timelines of the delivery of the equipment not being met, in addition, the interfacing of the newly installed network management system and the existing one can cause a problem given that the systems provided by dissimilar suppliers. The key upgrade deliverables are:
Issuance and adjudication of tender documents,
Field trials (to characterise the system),
Terminal station equipment manufacturing and delivery,
Installation and in-station testing,
Commissioning and system acceptance.
Capacity upgrades has become one of the most dynamic features of the undersea optic fibre cable industry. Upgrading existing undersea optic fibre system has proven to be more rewarding as it entails the provisioning of terminal station equipment and huge investment in the repeater design, cable manufacturing and all activities related to the submerged plant is not required which translates to cash savings. The only return on investment is that of the purchased terminal equipment. Furthermore, the ability to increase the existing system’s design capacity to higher levels has created an upgrade market which is mainly comprised of suppliers which provide only terminal station equipment, and as a result has created competition for the traditional system suppliers, this competition is evident by slow rate at which new systems are
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being deployed due to the upgrade activities on existing cables extending the economic life of the system.
The numbers of cables spanning the African continent were listed in figure 3 totalling nine systems. The last cables to be commissioned was WACS and ACE cable systems in 2012. No new cables are being constructed currently and this attests to the statement that the upgrade activities are slowing investment into new build cable systems.
5.2. Recommendations
Given the continued evolution of the transmission technology in the undersea optic fibre cable system field, which has made it possible to extend the economic life of existing optic fibre cable systems to beyond their original design capacities, It is recommended that existing systems be upgraded beyond their initial design capacities through the use of the latest terminal station equipment, this will extend the economic and design life of the systems and hence delay the system retirement thereby ensuring longevity in operational service, and increasing the value of the system, this is most beneficial as compared to investing on a new system.
Moreover, in most African countries, the state owns the telecommunications sector, which is ordinarily represented by a single entity, this means that for multiple cable systems on the same route the same entity will have to invest in the these cable systems tying more capital on cable systems procurement and the overall combined return on investment period will take longer to attain. It thus recommended that new system procurement be considered once all avenues of upgrading the existing cable systems are fully exhausted.
New build cable systems gives access to huge capacities but represent at huge capital investment amounts and the implementation time is also significant, it has been indicated that through technological advancements and through system upgrades, investments on new build cable systems can be delayed. Hence if a decision is to be made regarding upgrading or new built purchases, upgrading must be the first choice given its overall lead times on implementing the process being faster and more economical than the new cable build system, and second choice will be to procure a new system operating at the latest rates and new technology.
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Appendix A: Cable systems
WACS Geographical Layout
Figure 29 WACS cable system
SAT3/WASC Geographical Layout
Figure 30 SAT3/WASC cable system
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EASSy Geographical Layout
Figure 31 EASSy cable system
EIG Geographical Layout
Figure 32 EIG cable system
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Appendix B: Email Body
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Appendix C: Questionnaire
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Appendix D: Questionnaire responses
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