As a deep sea fibre optic cable installation specialist, NTT WORLD ENGINEERING MARINE CORP plays a critical role in Japanese telecommunications infrastructure connecting the island nation far and wide for better world communication
Japan’s last construction boom occurred more than 50 years ago, prior to the 1964 Olympics, and since then, due to the demographic shift, on one hand, there is an increased need for maintenance and upkeep. However, on the other, there is less need for newer construction projects. What is your take on the current state of the Japanese construction sector, especially when it comes to its telecommunications infrastructure?
I just want to give you some background. Before I was the president of this company, I was serving in a role for NTT Communications, helping them lay their infrastructural work, and so perhaps the way I respond will also take that into account and I hope you will understand that aspect.
If you look at Japanese telecommunications infrastructure, you will see that fiber optic cables are actually connecting not only urban areas, but far beyond them to surrounding regions, including outlying rural areas. In one respect, it really does look like it is already fully developed and there is no need for new projects when it comes to laying down such fiber optical cables. This means that all the islands including Okinawa, and throughout the islands, there is solid internet connectivity, and it looks like perhaps Japan has the best-connected environment. However, from the user perspective, there are some issues they must deal with when they need to process a large volume of data simultaneously. That is when they still face certain issues, but I do believe that if we are able to fully roll out 5G in an effective manner, such problems will also be resolved.
We believe that from the perspective of those who are involved in the industry, we are facing a huge turning point in the industry here in Japan. If I were to go a little bit deeper and explain, one of the ways in which we are starting to have a new perspective on the industry is in how to respond to disasters and events such as extreme weather events. With the increase in natural disasters and extreme weather events, especially in recent years, which is something none of us can overlook, there have been more and more situations where we have been dealing with interruptions in connectivity. We believe in creating a situation where we are able to fully respond to natural disasters and extreme weather events with our greatest capabilities. Up until now, what had been two routes would have to be expanded to three and even four routes in some cases. We strongly feel that we must not have situations that lead to interruptions in connections, especially when it comes to TV, radio broadcasting and internet connectivity.
Did you know that even when it comes to TV and radio broadcasting, fiber optic cables are being utilized? It is actually interesting, but if you were to connect Tokyo to Fukuoka with the TV broadcasting that is happening, most of that is done through fiber optic cables, and it is only at the end that the cable changes, when it is in Fukuoka itself. We see that there is going to be greater growth potential and the need for the building of further cables and networks in order to increase the assurance of connectivity in the case of natural disasters.
Another thing is to really consider, when you are thinking about the macro perspective, is the importance of the government and the national policies that are in place in order to strike a solid balance between connectivity in urban areas compared to outlying areas. For people all across Japan to really feel and live with ease and comfort wherever they are living, whether it is the urban areas or the outer lying regions, there is a greater need for municipal services to assure the equitable distribution of public services, and from that perspective also, our job is going to become paramount. We believe that in order for Japan to be fully aligned with its objectives, there needs to be an assurance that no matter where you are living, whether it is in the urban metropolis or in rural areas, you still have the same high levels of broadband, connectivity, and TV broadcasting services. In order to ensure that, what is necessary is that fiber optic cables are laid fully throughout all of the islands, not only here in Honshu, but also Okinawa, Kagoshima, the settle inland, all of the different smaller islands of Japan too.
I can give you one example, even within Okinawa there are smaller islands as well, and all such islands were connected by the fiber optic cables recently. Even for the last remaining cables, we were the ones who put them down and did the groundwork. All the outer lying islands around, such as Kita-Daito Island and the Yakushima Islands, were finally connected to the Okinawa mainland. I do not know if you know where Kita-Daito Island is located but it is far away. I think that is a really good example of the kind of work that we do and how we have been able to ensure these high levels of connectivity through our work.
Another, third, aspect is how we begin to deal with the aging of these cables, and what to do with the older models of cables that are under ground. A current issue is that the majority of fiber optic cables began to be laid throughout Japan in the latter half of the 1980s, and they are now getting old. Another aspect that adds to the issue is that these cables that are laid underground and every time there is construction work, these cables are cut and then reconnected, and each time that happens, it affects the quality of the cable itself. We believe that there is going to be greater demand for replacing these cables on a large scale.
On one hand, although Japan was one of the first in the world to lay these fiber optic cables, as a result of that they are all much more outdated now compared to the rest of the world. Especially when it comes to the needs of larger scale data being delivered, this is going to become a huge issue. In order to really have a full-scale optimal response to this issue, there is a huge need for all of the companies involved in the installation and management of cable infrastructure, both on land and in the sea, to come together and unite in order to solve the issue. As the NTT Group, and the ones in charge of the submarine cables, we are going to put all our effort into that, on the ocean side. Whereas the amount of growth that we saw during the peak of the market will not necessarily be the same, we do believe that there is a huge need for replacing these cables, which will be a great boost to the market.
Your consulting services must engage with a variety of stakeholders as you plan cable route designs, route engineering and permitting advice, as well as applications and negotiations with relevant bodies such as fishing unions. Can you explain to us a typical example of the diplomacy you engage in, and how are you able to unite the various stakeholders to complete your projects?
In terms of how it all works out, the large-scale project management is all done by NTT Docomo. They take charge of laying out the grand project scheme, and we call that part of the phase the ‘grand design’. This ‘grand design’ includes the exact details of where the cables will be laid out. For example, let's say that there is a plan to connect a cable from Kagoshima to Okinawa. First, we do the necessary research to find out which is the optimal route that will lead to the fewest breakdowns of the cable, and in which the cable will have a smooth lie without hitting certain hard surfaces. Then once the route is decided, we seek the necessary permissions from the farming communities and the farming unions in the area where the cable will be laid down, in order to ensure that it does not affect their jobs, and we get the right permits.
We believe that we have been doing a good job in following through and making sure that we are able to obtain the right permissions and permits, and we have been looking at it on a detailed level, with the farming communities and the farming unions, and we pride ourselves in doing that kind of a job. For example, we believe that it is actually quite specific in that once we do get their approval, we also negotiate with them to ensure that we start construction at the optimal time for them. For example, if the start of construction would coincide with a time when it is going to affect their harvest of a certain type of fish, then we make sure to change the timing so that it does not affect their livelihoods. For example, if it is in the middle of seabream season and it is going to affect their hauls, then we also make sure that we provide them with financial subsidies to take into account how it is going to affect their business, and make sure that we are able to do the best in order to ensure as much as we can.
Whereas NTT serves as the parent company in charge of the grand design of whatever project may be happening, we are the ones who actually take care of all of the details as project managers, not only conducting surveys, but also the negotiations, the scheduling and the operations right up until the finish. We believe that the key to diplomacy is nothing other than face to face dialogue. Having thorough dialogue where you gain the trust of the other party and enabling them to feel that they can get behind the entire process and having them be involved in it is much stronger than anything that is just based on logic alone. At the end of the day, it is really about gaining trust, and that can only be done through steady and thorough dialogue. Person to person communication. When we talk about DX and all of that, eventually it all comes down to face to face, person to person, heart to heart dialogue.
Undersea cables are hard to build as there may be difficulties such as underwater mountain ranges as well as fault lines and other difficulties may include fishing ships or anchors unearthing these cables, natural disasters damaging cables, and also currents and tides also displacing some of them. How is your firm helping to overcome these challenges when it comes to building and maintaining these undersea cable networks?
When it comes to the laying down of overseas cables, we do no necessarily have a protocol in place to ensure the regular inspection of these. However, when it comes to ensuring the inspection and regular checking of domestic cables, we are under obligation by the entire NTT group that is united in the understanding that the quality must be top notch.
For NTT East, West, Docomo, and everyone, it is part of the ‘grand design’ to have solid inspection and repair servicing of these cables. What is happening is regular inspections and monitoring of all of the cables utilizing submarine robots and other such equipment to constantly monitor all of the cables and inspect and see whether or not they are susceptible to certain rocks, or if they have been washed away or are they hitting a large rock that may actually lead to damaging them, or have they been affected by an earthquake or landslide? There may be those who think that these services are over the top, and we are providing surplus effort, but in the case of NTT, this is something that we ensure, and this is part of our policy.
Could you tell us a little bit more about the role that international collaboration plays in your business model, and are you currently looking for any overseas partnerships?
When it comes to our overseas business and international cables and such, what we are dealing with are those that are connecting Japan to these other countries. As for the ships that we have on the routes, most of our fleet is based in Japan and The Philippines. When it comes to the operation of our ships in The Philippines for example, especially with our main Subaru ships, we are in connection with a Filipino company in order to perform the operations. The engineers who are manning the ships are our company’s own engineers, who conduct the actual work of laying the cables, connection and inspection. Of course, the cables also need to be hauled over land, so when we are dealing with local land, we work in cooperation and collaboration with partners and stakeholders in the actual country, or with Japanese based companies who have partnerships with us.
Cable-Laying Vessel SUBARU
When it comes to our operations in The Philippines, we are also supporting the construction of their domestic network. With regard to utilizing our Filipino boats, our fleet there, and supporting to expand our operations within the country, from that perspective, we view The Philippines as our second mother country. We are looking to further expand our work and support there.
Actually, the Philippines do not have their own submarine cable laying ships, so they are reliant on overseas companies to provide that service, and we pride ourselves on being one of those companies that can support that. We are grateful that we have been able to be in charge of laying submarine cables for the flagship Filipino company, PLDT.
Japan is the world's oldest society and has a rapidly shrinking population, which presents a labor crisis. What are some of the challenges and opportunities this demographic shift is presenting for your company?
When we were thinking about how the demographic decline might affect our line of business, we realized that it does not necessarily affect the business as a whole, because infrastructure and connectivity is going to be required all the same. However, we do believe that with the immense advances in technology, which is growing at such exponential rates, there is going to be a requirement for infrastructure that can support large scale data processing. However, when you look at the fact that the overall working population in Japan is going to shrink, that is going to be quite a challenge.
The kind of work that we are involved with in the construction sector is certainly not considered attractive by graduates. We are in a line of business that is considered the ‘three K’s’, which is kitsu, meaning hard to do, kitanai, meaning dirty, and kiken, which means dangerous. When we are dealing with a sector that is considered difficult, dirty and dangerous, then it is definitely unpopular among new recruits or talented graduates.
Some industries are quite attractive when it comes to DX or innovation, but we are also delayed in that department. However, from another perspective, someone might think that precisely because of that, there is lots of potential, but those who think in that way are quite rare. To give you an example, when our work involves cables in shallower areas, rather than utilizing robots, those areas can be done by divers. That requires that kind of manpower. Working as a diver is the epitome of the ‘three K’s’ jobs that we just mentioned, so it is difficult to find recruits.
We are looking to see what we can do to expand the appeal of such work and how to begin using more DX processes, or maybe submarine robots or AI analytics. We are looking to work with our parent company, NTT, to see how we can strengthen this aspect.
I know this might be a dumb question but let me ask you. Do you think that when we have to transport cables from the factory and mount them onto ships, that machines do that? No. Oftentimes, if you were to do that in an automated way, then there is a higher chance that the cables would get twisted, so in order to get smooth coiling and rolling of the cables, you need people to do it. Imagine you are trying to mount 800 kilometers’ worth of cable. A human being does that and it takes two weeks. We are trying to work with our R&D facility to see if they are able to find solutions to this. 30 years ago, when we asked them, it seems that they did not have the technology at that time, but I am hoping that with advances in technology over the past three decades, they might have some sort of solution for us. In that respect, this industry is quite delayed.
CARBIS-III ROV system
Industry experts have estimated that undersea telecommunication cable networks carry about 95% of global intercontinental internet traffic, along with 90% of transnational digital data, including trillions of daily financial transactions, and with the emergence of 5G telecommunications technology, demand is expected to exponentially grow in the next five years. With this anticipated exponential growth in your area of expertise, what international strategy are you adopting in order to take full advantage of this growing demand?
First of all, there is certainly great growth potential for submarine cables and the need for them. It feels like the need for them is going to continue to grow, the demand being limitless. Actually, it is quite interesting to see the history and the trends in the industry. Some decades ago, there was almost zero demand for this. We understand that the reason for the emergence of this industry and the need for the laying of submarine cables to this extent is because the IT giants decided that they were going to transport their data.
I think the best measure to see whether this is going to be a viable market is the extent to which investment is there or not. That all depends on being able to monitor and see the demand, and how data centers continue to develop, and the need for them. As long as the construction of data centers continues, there is definitely demand for the laying down of fiber optic cables, but it really all depends. If data center construction stops, then we do not know where our market will go.
In recent times, we have seen that there is a trend among these giants. Their financial and cash flow situations are falling, and I am worried because let's say that the laying down of submarine cables or fiber optic cables for Meta, for example, were to decrease because of this, it would have a huge impact on the industry. Therefore, in order to create a sustainable business, it is important for us to think beyond new projects and put our efforts into ensuring that we have a consistent line of business through maintenance work.
I believe that we can really expand our overseas business through making good use of our high performance and track record in terms of maintenance and inspections that we have been able to develop as a result of working with NTT, and how we can actually roll this kind of services out overseas. However, we believe that being involved in construction projects will directly lead to increasing the technical skills of our engineers and developing talented human resources. When there are opportunities for new large scale construction work projects abroad, we will always continue to bid, since there is great benefit in doing so.
We want to continue to expand our work in The Philippines, where we have already developed connections of trust, and we want to make our work consistent there and be able to contribute to the country as well as grow together with them, considering the extent to which they are an emerging market in this field. We believe it is important not just to approach this from the perspective of making a profit from our overseas work, like the work that we do in the Philippines, but also to reinvest it into Filipino industry in order to contribute to the greater flourishing of the industry as a whole in the Philippines.
Imagine we come back to interview you again in six years' time. What would you like to have achieved by then?
I really want to create a company where people feel happy that they are working here, and that they can tangibly feel the fact that our company is serving society and doing something good. If that kind of culture is strong and thriving, I believe that it is much more important than simply the pursuit of profit. If we are able to maintain that approach, I believe six years from now we will be quite a successful company. That is my opinion. I believe that working in this realm of communications towards a greater connected community and society is something that one can feel pride in. The way we are contributing to our environment should also be something that our employees can feel pride in.