The recent news from the United States that the Federal Communications Commission (FCC), in all likelihood, will soon deny the Pacific Light Cable Network (PLCN) subsea cable system the license application for the Hong Kong leg of the cable, is terrible news for the city.
Given the two owners of the 120 Tb/s cable are two of the most ubiquitous global internet giants, Google and Facebook, only adds to Hong Kong’s woes and the bewilderment of its citizens. Such a scenario was indeed unthinkable.
Although not irreversible, the decision to exclude the Hong Kong leg of the 12,800 km PLCN cable is likely to remain for the short to medium term amid the ongoing and ever-worsening US-China tech wars.
Much has been written about Hong Kong’s undeniable loss, and Singapore’s eventual gain – the two Asian hubs are perennial competitors, and more often than not, success in one city comes at the expense of the other.
However, what seems to have fallen out of the PLCN narrative by most commentators, is the fact that the Philippines and Taiwan have emerged as the biggest winners in the long run. Indeed, the two countries constitute the only other Asian legs of the PLCN cable, and for a good reason. Google already operates data centres in Taiwan and planning further expansion. The Philippines ranks sixth in the countries with the highest Facebook users.
Taiwan is already operational since early this year, and the Philippines is scheduled to go live in a couple of months. That’s not all. The Philippines will soon boast participation in a second subsea cable named Jupiter. This 60 Tb/s cable partly owned by Amazon and Facebook will connect the United States with the Philippines and Japan early next year.
Connectivity drives data centre growth and represents an essential ingredient for the development of Singapore and Hong Kong as data centre hubs for South-East Asia, a fast-growing region representing 8.5% of the world’s population. But these hub positions are fragile as Hong Kong just witnessed. Singapore is also implementing a data centre build moratorium through next year while it ponders the impact on its carbon footprint due to the phenomenal growth of the past couple of years.
The COVID-19 pandemic has brought forward the adoption of cloud services and hence the development of data centres globally by a few years. This trend will be maintained, although never in a straight line as supply and demand for data centres juggle the lead back and forth. In South-East Asia, Indonesia is the current favourite for all the reasons mentioned earlier – it is a vibrant digital economy that is home for Alibaba and Google and soon Amazon.
However, we’re witnessing increased attention by data centre investors and operators for both Taiwan and the Philippines. This growth is being driven by data sovereignty laws and the availability of land and energy. Surely, new multi-terabit cables such as Jupiter and PLCN, that render older cables quasi obsolete can only make these two destinations for data centre operations even more attractive.