In this interview, a trio of specialists from Eversheds Sutherland talk some of the key themes in the submarine cable regulator space, including the increasing impact of geopolitics and the rise of the MENA region
In 2023, the regulatory landscape in the submarine cable industry is changing rapidly. Fuelled by geopolitical tensions and an increasing appreciation for submarine networks as critical infrastructure, governments are becoming increasingly active and heavy-handed in this space, posing a growing challenge for new submarine cable projects.
In the video below, Jukka-Pekka Joensuu, Walter Kulvik, and Cristina Audran-Proca, all partners and regulatory specialists at Eversheds Sutherland, discuss changes in the regulatory space and how this impacting the submarine cable ecosystem.
Perhaps the most significant regulatory trend for the subsea industry in recent years has been the increasing role of government intervention, spurred in no small part by the geopolitical rivalry between the US and China, as well as the war in Ukraine.
“What we’re seeing is an increasing concern around government intervention – something that’s creeping up as a material issue for most new cables,” explained Walter Kulvik. “The question is, how do you defend something that’s core infrastructure for the economy, but really quite difficult to monitor?”
He notes that concerns over national security have already seen multiple cables delayed, cancelled, or otherwise disrupted in recent years, particularly with regards to those travelling through Hong Kong.
“It’s very much in a state of flux, where no one quite knows what it will look like, though we’re all expecting government intervention to increase. So, it’s crucial for the industry to educate governments about the subsea industry,” added Kulvik.
France remains a digital giant
But while geopolitics is causing significant headaches for cables in some parts of the world, other regions continue to bloom. For Cristina Audran-Proca, France is going from strength to strength in the global connectivity landscape, buoyed by attractive government regulation.
“France has a privileged position, being situated between the Mediterranean and the Atlantic. It’s at the centre stage of European connectivity,” said Audran-Proca, noting that 23 international cables already land in France.
Marseille, in particular, remains an epicentre of European connectivity, with the government having made significant efforts to ensure that future cable deployments can be achieved seamlessly.
Since 2020, the government has offered a single point of contact for cable developers into all of the French administrations, a move that Audran-Proca described as a “huge facilitator” for future cables. In addition, the Port of Marseille itself has developed a fully integrated, turnkey landing solution, further removing barriers for budding cable projects.
“All of that makes an ecosystem that is really favourable for further development. Marseille is currently number 7 in global digital hubs and France is the only country in the world that has two hubs in the top ten. So, I think this trend is going to continue,” said Audran-Proca.
Hubs of the future: Developing Africa and the Middle East
In addition to France, the Middle East and Africa (MENA) region also continues to develop steadily.
Unlike Europe, these are markets that are largely underserved by subsea and terrestrial connectivity, offering a huge platform for growth.
From new cables looking to travel through and around Saudi Arabia to the deployment of the colossal 2Africa cable, this is a region that will remain awash with new cables for years to come.
“We see clients considering doing subsea alongside satellite and terrestrial infrastructure to get better access to central Africa. It’s one of the biggest parts of the world where access has traditionally been limited,” explained Kulvik.
However, while these regions are undoubtedly full of potential, they also offer a regulatory challenge, particularly when it comes to connecting with neighbouring countries.
“We’re seeing issues with regulations and access rights with governments across the region, so it’s not without its difficulties,” said Kulvik.
If you want to hear more from the Eversheds Sutherland team, you can join them in discussion at this year’s Submarine Networks EMEA event. Find the Eversheds team at Sponsor Networking Table 1