Economic and social impact of Meta’s submarine cable investments in APAC

27 February 2022 | Consulting

David Abecassis Michael Kende Dion Teo

Report | PDF (66 pages)

The internet has become increasingly important for users, businesses, governments, and the social and economic welfare of countries. On top of this, the response to the COVID-19 pandemic has created a fundamental shift in how people conduct their daily lives, as remote working and remote schooling have resulted in many activities increasingly being conducted through online digital services.

Access to the internet is therefore more critical than ever to enable people and businesses throughout the world to communicate, learn, work, trade and participate fully in everyday life.

Submarine cables act as the underpinning infrastructure for international and overseas connectivity, delivering content that reside in data centres across the world. This is an expensive part of the infrastructure value chain and has traditionally been reliant on investments from a limited group of incumbent telecoms operators. Submarine cables are especially important in Asia–Pacific (APAC) because the region has an abundance of island and archipelago nations, such as Indonesia, the Philippines, Japan, Singapore and Australia, as well as coastal nations including Malaysia, Thailand, Vietnam, Cambodia and South Korea.

Increasing APAC submarine investments is critical to enable connectivity between these nations and ensure the future growth of digital economies in the region. In recent years, content, applications and service providers (CASPs) including Meta have invested in submarine cables, often partnering with telecoms operators in APAC, and other CASPs.

Meta has already invested in two submarine cables in APAC, and has announced its commitment to a further eight systems to be deployed by 2025. While new cables will continue to land in established submarine cable hubs in APAC (i.e. Singapore, Japan, Hong Kong), they will also increasingly reach other APAC countries such as Indonesia and the Philippines.

We estimate that cables in which Meta is an investor could contribute over USD422 billion in additional GDP (in real terms) between 2021 to 2025 and support up to 3.7 million additional jobs by 2025. To fully unlock the forecast benefits of these cables, and attract yet more, governments, policy makers and regulators in APAC should consider adopting regulatory best practices from APAC markets that have a strong supply of submarine cables. These countries typically have policies that are supportive of submarine cable licensing and permitting, deployment, access and the protection and maintenance of submarine cables.