Competition between the United States and China continues to be a hot topic.
Take The Economist, which recently published America v China: who controls Asia’s internet?
While this piece did a great job highlighting the impact of geopolitical tensions on telecom infrastructure throughout Asia, my colleague Alan Mauldin and I want to expand on this coverage by offering updated data on two important areas of the story: cloud and cables.
When we talk cloud, we're usually talking about the core of the cloud, or cloud regions. Regions are where the magic happens for all cloud services like computing and storage.
Cloud regions are groupings of data centers that are usually, but not always, located in a major metro or key geographic area. They often come in groups of three but can range from a single data center to a dozen.
Looking at the latest TeleGeography data on cloud regions, we see major shifts underway with cloud providers in Asia.
Currently, Thailand only has active cloud regions from the big three Chinese cloud providers: Alibaba, Tencent, and Huawei. However, all three major U.S. cloud providers—AWS, Microsoft, and Google—have announced plans for new cloud regions there within the next year.
Share of Cloud Regions in Selected Asian Country by Cloud Provider Type
Does this mean that users in the Philippines and Thailand—where all current regions are owned by Chinese entities—can't access Google? Or other U.S.-owned cloud services?
Nope. Cloud regions are where cloud services are housed, but there's another type of cloud infrastructure.
Cloud on-ramps are needed for carriers to interconnect with cloud provider networks.
Cloud on-ramps are needed for carriers to interconnect with cloud provider networks. These on-ramps are often found in colocation facilities in the most interconnected cities.
AWS and Google have cloud on-ramps in the Philippines; all major U.S. cloud providers have on-ramps in Thailand.
Share of Cloud On-Ramps in Selected Asian Country by Cloud Provider Type
What happens when a cloud provider has neither a cloud region nor a cloud on-ramp in a country?
In that case, users in the country would have to reach the cloud provider via a cloud on-ramp in another country. Most would perceive this process as seamless, but it adds unwanted latency to the connection, downgrading the user experience. This explains why cloud providers have spent so much money building out regions and on-ramps globally.
Now seems like a great time to mention our Cloud Infrastructure Map. It's a free and frequently updated resource packed with data on global cloud developments. But back to the topic at hand.
Competition between China and the U.S. is also happening under the sea.
Ongoing geopolitical tensions have left the United States and its allies hesitant to rely on Chinese suppliers, namely HMN Tech. While we don’t have time to dig into the related national security, espionage, surveying, or cable maintenance concerns, we can explore how easy it is to avoid cables owned by HMN Tech.
Let’s look at how widespread Chinese-supplied cables are and see if they're increasing in market share.
Using our submarine cable map, we can filter to show existing and planned cables for HMN Tech.
HMN Tech has built systems of various lengths in many regions of the world, but the company’s new projects include only three cables in the South China Sea and a domestic system in the Maldives.
Planned Submarine Cables Supplied by HMN Tech
While we estimate there’s nearly $11 billion of investment in new cables entering service from 2024-2026, most of these will be built by Subcom, ASN, and NEC.
While we estimate there’s nearly $11 billion of investment in new cables entering service from 2024-2026, most of these will be built by Subcom, ASN, and NEC.
These three companies are by far the biggest suppliers of all cables in the fiber optic era. HMN Tech remains a much smaller cable supplier with only a 5% market share over the next few years.
Why? One reason may be efforts by the U.S., Australia, India, and Japan—the Quad Partnership—to encourage network operators to use non-Chinese suppliers in new cable systems.
For the latest intel on the cloud services market and the submarine cable industry, check out TeleGeography’s Cloud and WAN Research Service and Transport Networks Research Service.