* Alcatel Submarine doubles transmission capacity in tests
* Breakthrough comes as market picks up due to Internet
* Nokia considering options for business, including possible
(Adds details of potential sale of business, context)
By Eric Auchard
FRANKFURT, Oct 12 Nokia's Alcatel
Submarine Networks (ASN) said on Wednesday it set a new record
for cable transmission capacity for communications traffic -
doubling its previous levels - as the company responds to a
pick-up in demand from Internet firms.
The top supplier of undersea cable networks said that with
the company's research arm, Nokia Bell Labs, it had demonstrated
in lab tests a 65 terabit-per-second transmission using
dual-band fibre amplifiers - the equivalent of streaming 10
million high-definition TV channels simultaneously.
The subsea cable business, which makes global Internet links
possible, has long been subject to both big advances in
technology and dramatic capacity gluts, which, in turn, helps
drive further demand by slashing network costs, analysts say.
Nokia, which bought ASN earlier this year as part of its
15.6 billion-euro ($17.5 billion) acquisition of French telecom
equipment maker Alcatel, has said it is considering its
strategic options for the business.
UBS predicted on Wednesday it would eventually be sold.
Market research firm Telegeography estimates the market is
poised to see an explosion of new cable deployments worth more
than $8.1 billion over the next three years.
Google, Microsoft and Facebook are
no longer just customers but have begun to back cable-building
ventures of their own, joining traditional subsea cable project
consortia made up of telecom operators or government backers.
"The Internet players are driving demand across the Atlantic
and Pacific, within Asia to some degree and between Latin
America and the United States," said Alan Mauldin, research
director at Telegeography.
While only three subsea networks worth $490 million were
deployed in 2015, 33 networks are set to be built within the
next three years, Telegeography predicts.
Another forecaster, Terabit Consulting, predicts up to $22.4
billion could be spent in coming years across 155 projects,
although only a third of these, worth around $6.3 billion, are
likely to be built in the next two to three years, it says.
SEEKING A BUYER
Alcatel Submarine is the market leader in undersea cable
networks with a 47 percent share of the market in the decade up
to 2014, according to market research firm Terabit Consulting.
Nokia does not disclose specific results for ASN, saying
only that it enjoyed year-on-year growth in revenue and gross
profit in the latest quarter, partly offset by weakness in its
terrestrial cable business, known as Radio Frequency Systems.
Rivals include U.S.-based TE SubCom, with 30 percent and NEC
with 12 percent. Smaller rivals range from Fujitsu
with 4 percent to Huawei Marine with 2 percent to
Ericsson, with just 1 percent share in 2014.
ASN has been effectively up for sale for years. Potential
bidders including European private equity funds and the French
sovereign wealth fund Fonds Strategique d'Investissement were
eyeing the company in 2013 but no deal was reached.
Alcatel considered a stock market flotation of the submarine
unit last year before it was sold with the rest of Alcatel to
However, because of the sensitive role such cables play in
global communications, any buyer must meet stringent national
security criteria from Western governments for any deal to be
completed, complicating the search for buyers.
($1 = 0.8928 euros)
(Reporting by Eric Auchard; Editing by Edwina Gibbs and Adrian