Industries Where Dark Fibre is Critical

Xenith IG

Author at Xenith IG

Dark fibre, or unlit optical fibre network infrastructure, is often leased by organisations requiring high speed data transmissions for their operations. But dark fibre isn’t chosen merely for its speed. Owing to dark fibre’s reliability, scalability, security, and control, it has become a necessity in some industries today, or one could say, an obligation to the customers they serve.

Let’s look at some of these industries.

Telecommunications / Communications Service Providers
As providers of network bandwidth in an increasingly digital world, telcos and CSPs are one of the key users of dark fibre. It makes good business sense as dark fibre bandwidth is virtually limitless (depending on the technology and equipment used by the company), it is highly reliable, and it offers better security.

Having almost limitless bandwidth offers telcos and CSPs the flexibility to build protocols and adjust bandwidth depending on business demands. This is a significant advantage as telcos and CSPs can future-proof themselves against the need for higher bandwidth – a definite topic of interest amid today’s rising demand for 5G networks. Because they would own or lease the physical dark fibre infrastructure, they would have the flexibility to upgrade the equipment when greater bandwidth is needed.

Reliability is another reason telcos and CSPs turn to dark fibre. As they are held accountable for network availability, outages can often lead to stiff financial fines from regulators, not to mention serious reputational damage. Dark fibre networks are incredibly reliable and are the most resilient networks deliverable today. As private networks, telcos and CSPs have the control to choose the shortest pathways for faster speed. Or design bespoke pathways for network performance that ensure network availability and reliability.

Rising security concerns is another reason this sector is choosing dark fibre networks. With huge amounts of sensitive data, cyber breaches can result in grave consequences. In October 2022, one of Australia’s largest telcos was hacked and 10 million of its customers’ details were compromised. In response, the company earmarked A$140M (~US$88.2M) to cover the cost of the data breach.

Dark fibre provides greater security than other any other available option today as companies lease it for their private and dedicated use. Their network is not shared with any external entities. They are the only ones that has visibility into and control and of their data. They can also implement unique data security protocols tailored to the business. Hence, it is not subjected to the same vulnerabilities as public networks.

High Tech
The high-tech sector is another one that look to dark fibre for their network infrastructure needs. This includes Big Tech companies, eCommerce marketplaces, cloud computing platforms, and software firms. They are choosing dark fibre for its high performance coupled with sound ROI, scalability to future-proof the business, and for the greater security it offers.

Many of these high-tech companies are increasing their investments in data centre construction. With dark fibre, these firms find that they can provide redundancy and improve latency – all while saving on costs.

Redundancy is an especially crucial aspect of network connectivity for these high-tech businesses as they cannot afford to have any downtime or interruption in their operations. Many data centres would have redundant networks set up as part of their disaster recovery / business continuity plans. But depending on internet service providers (ISP) does not offer true redundancy as many different ISPs often share the same physical infrastructure. That means a construction accident that causes one ISP to go down can affect the backup provider. Dark fibre eliminates this problem as dark fibre networks are fully separate from the physical infrastructure used by ISPs.

Dark fibre reduces network latency – the time that data takes to transfer across the network.

Cost is another reason high-tech companies choose dark fibre. While the initial investment for dark fibre may be high, it works out in the long-term as data centres deal with a lot of data that needs seamless transference. That means it works out more beneficially cost-wise to choose dark fibre infrastructure than pay for higher levels of service with traditional ISPs.

Like telcos and CSPs, the high-tech industry also opts for dark fibre network infrastructure as it is a dependable and flexible core that is scalable as business demands changes.

Similarly, they face mounting pressures from cyber criminals looking to exfiltrate their valuable data. High-tech firms are facing an escalating number of cyberattacks in APAC. In August 2023, online cashback portal, ShopBack, was hit with a fine of S$74,400 (~US$54,100) for a data leak that affected more than 1.4 million customers. Rather than paying for fines, it makes better business sense to invest in a more secure network infrastructure.

Financial Services
Financial services institutions, including Fintechs, are increasingly seeing the importance of dark fibre infrastructure as their network services are mission critical and cyberattacks are on the rise.

For these organisations, their core business necessitates the availability and reliability of their networks. As such, network disruptions usually result in serious financial penalties, share price erosions, and corporate embarrassment. In March 2023, Singapore’s DBS Bank’s share price tumbled 1.4% after a 10-hour outage of its digital services. Later in May, Singapore’s central bank, the Monetary Authority of Singapore (MAS), imposed a multiplier of 1.8 times (S$1.6B, ~US$1.2B) to DBS Bank’s risk-weighted assets for operational risk. This was up from the 1.5 times multiplier previously applied in 2022, after it suffered its worst outage in more than a decade in November 2021. Its CEO had to apologise for the service outage that MAS found “unacceptable”.

Late last year, Taiwan’s Financial Supervisory Commission (FSC) also imposed an administrative fine of NT$12 million (~US$380,000) on Cathay United Bank, the highest ever imposed on a bank by FSC. This was after its online banking and mobile banking services went down. It also cut the bank president’s salary by 30% for 3 months as punishment.

This is why speed (or low latency) is a critical aspect of network connectivity for the financial services sector and why dark fibre makes sense. Dark fibre reduces network latency – the time that data takes to transfer across the network. Networks with a longer lag have high latency; those with fast response times have low latency. Dark fibre enables the lowest latency possible so that these organisations can get the highest speed and performance in their network connections.

In the face of adverse network events and as commitment to uninterrupted digital banking services 24/7, there is no wonder financial services institutions are turning to dark fibre, which offers the most resilient, reliable, and high-performing network infrastructure option available in the market today.

Like telcos, CSPs and the high-tech industry, the financial services sector is also challenged by sophisticated cyber criminals and mounting cyberattacks, given the amount of valuable data they have. With dark fibre, they can ensure their data is transmitted over a secure and private network, minimising the risk of data breaches.

Share this post