In Jules Verne’s 1869 novel 20,000 Leagues Under the Sea, Captain Nemo’s Nautilus submarine cruises past the first transatlantic telegraph cable. The book was published only three years after the first successful attempt to lay the undersea cable and was as wondrous at the time as Verne’s story. It connected New York and London and transmitted eight words per minute.
Businessman Cyrus Field first attempted to connect the two continents in 1858. He made five more attempts before he was successful, though it almost bankrupted him in the process. As historian Gillian Cookson said in a PBS documentary, “It was really a tool of commerce and a tool of news agencies. But because information could be passed so quickly and news could travel between the continents, [it was] revolutionary.”
The biggest economic impact, according to historians, was the ability to support faster stock trading between London and New York. In the same documentary, author John Steele Gordon said, “You could arbitrage prices; if something was expensive in London and cheap in New York, well, you could buy it in New York and simultaneously sell it in London and make money. The two great centers of capital in the world became closer together, thanks to the Atlantic cable.”
Other communications advances followed, though not quickly. A telephone cable linking the continents was first proposed in 1920, but took decades to come to fruition. The first transatlantic telephone cable (TAT-1) was inaugurated on September 25, 1956. It took another 30 years before the inauguration of the first transatlantic fiber-optic cable (TAT-8), in 1988.
Interestingly, in September 2010, Hibernia Atlantic announced the deployment of the first new transatlantic fiber-optic cable in a decade. It promises latency of less than 60 milliseconds. The announcement proves that the more things change, the more they stay the same. The company’s justification for putting in the new line? To speed up communications between trading markets in New York and London.
New Cable Catalyst for Economic Development
But as with most things both technological and economic, there is a multiplier effect. The technology and reliability of undersea cables have advanced to the point where they’re no longer the wonders they were in Jules Verne’s day. They’re expanding communication and connections far beyond the trading floors to developing countries.
Four undersea cables already connect Africa; three more are set to go live by 2012. As Jimson Olufuye, president of the Information Technology Association of Nigeria, told African magazine Next, “Africa is the last frontier to be developed, so the arrival of the cables will greatly help in meeting the continent’s developmental challenges. It is a sign that Africa has no more excuse not to develop.”
The economic impact is startling. The deployment of the new cables has the potential to bring bandwidth costs down by as much as 90 percent. Talk about a business opportunity: the capabilities Cyrus Field envisioned 150 years ago have the ability not only to connect a population digitally to the rest of the world, but it gives Africa the potential to be the new Asia.
That means a massive number of new citizens and consumers connecting to the rest of the world for both business and pleasure. For companies, it means both a new connected market and an increasingly educated connected workforce.