Long-distance Cable Costs

Ever wonder how much a long-distance cable costs? Apparently, the costs to rent a slice of a long-distance cable from AT&T or MCI are quite high. A 1000km OC-3 (150Mbps) link may cost in the neighborhood of $1,000,000 per year, for terrestrial cables. I would guess that undersea cables are much more expensive to rent.

But how much does it cost AT&T to install one of these cables?

Undersea Cables

This table lists some undersea cables, their speed, estimated total cost, cost per km, and cost per megabit.

Cable

Bandwidth

Length (km)

Project Cost

Cost/km

Cost/Gbps/km
Completion
Date
TAT-9 565Mbps 9,310 $450M $48,355 $85,548 March, 1992
TPC-4 560Mbps 9,860 $373M $37,830 $67,553 Oct., 1992
CIOS 622Mbps 261 $10M $38,314 $61,598 late 1993
TPC-5 5Gbps (max 20) 25,000 $1.12B $44,800 $8,960 late 1996
FLAG 10Gbps 27,000 $1500M $56,000 $5,600 1997?
Columbus III 10Gbps 11,000 $300M $27,000 $2,700 July, 1999
My source for this data is primarily press reports on the web from the companies laying the cables (primarily AT&T). Click on the cable names in the first column to see the press reports.

Summary

The short answer is that undersea cable costs about $50,000 per km to install, independent of the speed of the cable. In the last 5 years, there is a very clear trend. The cost per gigabit has steadily dropped, and is now a factor of 10-20 less than what it was in 1992. This cost reduction appears entirely due to the huge increase in cable bandwidths.

More info

See the AT&T Technical Journal Volume 74, No. 1 (Jan / Feb, 1995) for an interesting issue about undersea cables.

Also, visit the International Cable Protection Committee for a list of all undersea cables.

Wired magazine had a fascinating article in early 1997 by Neal Stephenson about laying the FLAG cable. I don't have the exact link to it, but a net search should turn it up.

Hugh Holbrook - holbrook .at. dsg .dot. stanford .dot. edu