The Economic impact of the forthcoming Equiano subsea cable in Portugal

Subsea cables are key elements in the global network infrastructure supporting a well-functioning internet. They connect continents and power the global growth of the internet, enabling better local user experience and global traffic stability.

Equiano – a Google-funded state-of-the-art subsea cable scheduled to be operational in 2022 – is being deployed from Portugal to South Africa to improve the digital connectivity between Europe and several West African countries.

Individuals, companies, the public sector, and telco operators will benefit from Equiano by getting access to Google’s services and broadband provided via telco services operated on some of Equiano’s fibre-pairs.

A key backdrop for Equiano is the wider picture on connectivity in Portugal, which is under development. In the 2021/2022 interval, a surge in international internet capacity landing in Portugal will take place, given the forthcoming activation of both Equiano and EllaLink (connecting Portugal to West Africa and Brazil).

The main conclusions of our study are:

• The two 2021/2022 forthcoming cables are expected to lower the latency and increase the internet bandwidth for internet users in Portugal, which increase the internet usage and subsequently increase Portuguese GDP by up to €500 million per year.
• This impact arises from several fundamental economic enablers:
  • Trade impacts: Equiano lowers the cost of trading data between Europe and Africa and thus reduces the barrier to trade, allowing more Portuguese firms to trade with Africa.
  • Investment impacts: Equiano is expected to have a positive impact on foreign direct investments going to Portugal, as Portugal becomes a more attractive investment location as a digital gateway to Africa.
  • Productivity impacts: Key digital infrastructure, such as Equiano, enable and support possibilities for teleworking and online meetings, thereby maximising the time spent working.

For the continuous development of digital connectivity infrastructure, good framework conditions must be in place to ensure sound investments in digital infrastructure. Therefore, we recommend that policy-makers consider relevant policy actions for (i) deploying subsea cables, (ii) maintenance of subsea cables, and (iii) general policies and political vision – as discussed in the study.

The study is commissioned by Google.

For enquiries on the study, please contact Dr Bruno Basalisco.