Google unveils $1B plan for subsea cables to Japan

Google has announced a $1 billion investment to deliver two new subsea cables, Proa and Taihei, to create new fiber-optic routes between the continental U.S. and Japan.

Initiated in collaboration with several partners, including KDDI, Arteria, Citadel Pacific, and the Commonwealth of the Northern Mariana Islands (CNMI), the cables will improve digital connectivity between the Japan and multiple Pacific Island countries and territories that are already well-connected to the continental US, Google said in a blog post.

The Proa cable will connect Japan to CNMI and Guam, which are both connected to the continental US by the Taiwan-Philippines-US (TPU) cable. Taihei will link Japan with Hawaii, which is connected to the continental US by the TABUA cable.

Additionally, Google is investing in the construction of an interlink cable that will span Hawaii, CNMI, and Guam. This interlink will improve connectivity for users in the Pacific Islands and around the world by linking transpacific routes.

Benefits for US businesses  

Submarine cables have the potential to deliver economic and productivity improvements to the regions they connect.

The investments in network infrastructure Google has made across the Asia-Pacific (APAC) region supported approximately 1.3 million additional jobs by 2021 and contributed $640 billion to the region’s aggregate GDP from 2010 to 2021, according to a report from Analysys Mason commissioned and sponsored by Google.

Furthermore, such investments offer opportunities for US-based companies to enhance their presence in the APAC region. This is particularly significant at a time when geopolitical dynamics are prompting businesses to seek alternatives to Chinese entities.

“Overall, it will stimulate demand for more data-intensive businesses,” said Pareekh Jain, CEO of Pareekh Consulting. “It will affect bandwidth-intensive sectors, such as e-commerce, finance, and others. We can observe the integration of technology-driven innovations, which is crucial. Japan, an aging society, is at the forefront of adopting technological advancements, including automation. The country is home to some of the highest numbers of robots, especially in domestic settings, showcasing a strong inclination towards innovation.”

The benefits may be seen across sectors. In e-commerce, for instance, faster and more reliable data transmission could revolutionize customer experiences and streamline supply chain management, according to Thomas George, president of CyberMedia Group.

“A robust infrastructure ensures reliable and swift connectivity, minimizing downtime and disruptions in operations, which is essential for providing a positive customer experience, especially in today’s hyper-connected world,” George said. “For the manufacturing sector, this enhanced connectivity may pave the way for advanced automation and real-time monitoring of production processes. In the financial sector, accelerating data processing and transmission could enable more timely and accurate decision-making, which is crucial in environments such as high-frequency trading.”

Strengthening Google’s APAC presence

For Google, this infrastructure development could solidify presence in APAC, as more companies may come to rely on its cloud services for operations.

“A key motivator for Google is to expand their own business,” Jain said. “This initiative falls within the infrastructure segment of Google Cloud, with data management being a significant aspect of their services. Japan plays a crucial role in this strategy. Unlike China, which favors local cloud services, Japan is open to international companies. By investing in various initiatives, Google can aim to capture a larger market share in Japan, targeting both government and private sectors.”

The government sector plays a significant role in the cloud computing industry, with Google aiming to secure partnerships and contracts within this space, Jain added.

“The increasing reliance on cloud services is expected to drive demand for data-intensive businesses, leading to the expansion of data centers and cloud computing work,” Jain said. “For Google, this trend not only enhances its position in the cloud computing market but also aligns with its efforts to support the Japanese government’s initiatives. By contributing to these government-led promotions, Google aims to secure a more substantial portion of government contracts in Japan.”

Impact on small and ancillary business

Although larger enterprises may benefit the most, smaller firms also have a chance to seize the opportunity, George pointed out. But it’s too early to know how this will unfold.

Additionally, the infrastructure investment could serve as a catalyst for growth in ancillary businesses for US and Japanese companies.

“Cybersecurity services are poised to be in greater demand as the volume of data transmission escalates, necessitating more stringent protection measures,” George said. “Similarly, adopting cloud-based solutions is likely to experience a surge as businesses strive to harness enhanced connectivity for scalable and flexible computing resources. This scenario could open substantial opportunities for companies operating within these sectors.”

This could also have an impact on the geopolitical scenario, which heavily influences data management. George added that this investment holds the potential to bolster the relationships and interests between countries by fostering a shared, trusted digital public infrastructure and connectivity, which is crucial in today’s shared and data-driven economy.