Alphabet's Google To Deploy Another Subsea Cable Equiano

Alphabet Inc.’s (NASDAQ:GOOGL) division Google recently announced that it will be commissioning a new subsea cable, namely Equiano, which will connect Africa and Europe.

In regard to this project, Google signed a contract with Alcatel Submarine Networks in the fourth quarter of 2018. The first phase of the project, which connects South Africa and Portugal, is expected to be completed in 2021.

Based on space-division multiplexing (SDM) technology, the Equiano cable will incorporate optical switching rather than traditional wavelength-level switching, making it easier to reallocate the same in different locations per requirement. Equiano will have approximately 20 times more network capacity than the last cable built to serve this region.

Subsea cable networks help businesses to manage growing data consumption, given lesser costs and latency. Further, connectivity between these locations will be enhanced, which in turn, will boost growth of businesses.

The latest move will further help to boost Google’s cloud computing infrastructure.

Other Cable Investments

Equiano will be completely funded by Google. This project is the company's third private international cable.

This April, Google completed the Curie project that was announced last January. Curie is a 6,200-mile long cable that connects Los Angeles and Chile. With Curie, Google became the first non-telecom company to have a private intercontinental cable of its own.

Last year, in addition to Curie, Google had announced other projects such as Havfrue, which will be a 4,500-mile cable connecting the east coast of the United States with Ireland and Denmark, and HK-G, which will be a 2,400-mile cable between Hong Kong and Guam.

Moreover, Google Dunant transatlantic submarine cable project, which connects France and the United States, is expected to be operational in 2020.

Expanding Cloud Infrastructure Boosts Google’s Position

Google has been investing substantially to continuously improve its global technology infrastructure. Over the past three years, the search giant invested about $47 billion on infrastructure improvement.

There is a significant boom in new subsea cable construction due to exponential rise in data, resulting from web browsing, e-commerce, video streaming and artificial intelligence. Total subsea cable bandwidth is projected to double by 2021.

We believe Google remains well poised to cater to this fast-increasing requirement for subsea cables.

According to Google, Equiano is its 14th subsea cable investment globally. The new regions and commissioned subsea cables will expand Google network across the globe. The company has a strong clientele that includes the likes of PayPal (NASDAQ:PYPL) .

Moreover, expanding infrastructure will eventually boost Google’s position in the cloud computing market, which is currently dominated by the likes of Amazon.com (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) .

Zacks Rank

Currently, Alphabet has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>