Microsoft joins consortium for India-Southeast Asia submarine cable

What happened?

Microsoft has joined the consortium led by Singapore-based Lightstorm to build a new submarine cable connecting India with Singapore and Malaysia, the two companies announced on Thursday. The system, named I-2SEA (India-to-Southeast Asia), will span 3,600 kilometers and is designed to support the growing demands of artificial intelligence, cloud computing, and hyperscale workloads that have made India one of the most contested markets in the world for digital infrastructure. Lightstorm, founded in 2018 by industry veteran Amajit Gupta, has already participated in other submarine cable projects in the region, such as Southeast Asia–Middle East–Western Europe 5 (SEA-ME-WE 5) and Asia-Africa-Europe-1 (AAE-1), accumulating experience in Asia's complex connectivity ecosystem.

Why is it important?

India is currently the second largest internet market in the world, with over 900 million users, and its data consumption is soaring year after year: according to the Nokia Broadband Index 2024 report, mobile data traffic in India grew 23% year-on-year in 2023. Southeast Asia, meanwhile, is home to key tech hubs like Singapore — which hosts more than 20 hyperscale data centers — and Malaysia, which is emerging as an attractive destination for data center investments thanks to its favorable policies and strategic location. Submarine connectivity is the backbone of global data traffic, and this new cable will not only increase available capacity but also improve redundancy and latency for Microsoft services (Azure, Teams, Office 365) in the area. Currently, most traffic between India and Southeast Asia relies on cables like SEA-ME-WE 5 and the India-Singapore Cable (ISCL), which are reaching their maximum capacity. I-2SEA will provide a critical alternative route, reducing latency by approximately 5-10 milliseconds for connections between Mumbai and Singapore.

Moreover, the project reflects the strategy of big tech companies to diversify their data routes, avoiding dependence on a single provider or geopolitically sensitive route. The alliance with Lightstorm, an emerging operator with experience in Asian submarine cables, gives Microsoft more direct control over critical infrastructure. This move is similar to Google's investment in the Firmina cable (connecting the US with Argentina) or Meta's participation in the 2Africa cable, which encircles the African continent. By being a partial owner of the infrastructure, Microsoft can prioritize its traffic, ensure service quality, and reduce long-term costs, instead of relying on traditional operators like Tata Communications or Singtel.

Consequences and context

The I-2SEA cable adds to a long list of investments in submarine infrastructure by cloud giants. Google, Amazon, and Meta have also participated in similar consortia in recent years. According to TeleGeography data, more than 30 new submarine cable systems were announced in 2023, with total investment exceeding $10 billion. For India, this new route boosts its goal of becoming a global data processing hub, especially after the recent approval of data localization policies, such as the Personal Data Protection Act (2023), which requires sensitive data of Indian citizens to be stored within the country. This has led companies like Microsoft, Google, and Amazon to expand their data centers in India: Microsoft already operates three Azure regions in India (Central, West, and South) and plans to open a fourth in Hyderabad by 2026. The I-2SEA cable will directly connect these regions with the hubs in Singapore and Malaysia, facilitating data replication and disaster recovery.

From a technical standpoint, the cable will employ state-of-the-art technology with high-capacity optical fibers, likely with 12 fiber pairs and an initial capacity of several terabits per second. Although specific figures have not been disclosed, the system is expected to be operational by 2027. The chosen route avoids the Strait of Malacca, a congested area prone to disruptions from ship anchors, and instead runs through deeper waters west of Sumatra, increasing resilience. This design is comparable to the SEA-ME-WE 6 cable, currently under construction, which will also connect India with Southeast Asia but via a longer route (4,500 km).

"Microsoft's inclusion in the I-2SEA consortium reinforces the trend of big tech companies investing directly in submarine infrastructure to ensure service quality and network resilience." — TheVortiq

What should readers know?

• The consortium is led by Lightstorm, a digital infrastructure operator based in Singapore that has already participated in other cable projects in the region, such as SEA-ME-WE 5 and AAE-1. Lightstorm has also raised over $200 million in debt and equity financing to expand its network.
• Microsoft is not the only technology partner; other companies are likely to join in later phases. Historically, submarine cable consortia include multiple operators and content providers to share costs and risks. For example, the Asia-Africa-Europe-1 (AAE-1) cable has 16 partners, including China Telecom, Singtel, and Etisalat.
• The I-2SEA cable will not only benefit Microsoft's cloud services but will also offer capacity to other operators and enterprises, fostering competition and reducing connectivity costs. According to Lightstorm, the cable will be open to IRU (Indefeasible Rights of Use) capacity sales for other service providers, which could reduce wholesale prices on the India-Singapore route by 15-20%.
• This project aligns with India's 'Digital India' initiative and the expansion plans for data centers in cities like Mumbai, Chennai, and Hyderabad. The Indian government has identified submarine connectivity as a key enabler for its vision of becoming a hub for electronics manufacturing and digital services. Additionally, the cable will support the growth of artificial intelligence in India, which requires robust network infrastructure to train large-scale models and serve real-time inferences.
• From a geopolitical perspective, the cable strengthens digital ties between India and Southeast Asia at a time when China is aggressively expanding its influence through the Digital Silk Road. Indian companies like Reliance Jio and Bharti Airtel are also investing in submarine cables to reduce their dependence on routes that pass through China.

In summary, Microsoft's entry into the I-2SEA consortium is a strategic move that reinforces its presence in Asia and secures the infrastructure needed to support the exponential growth of data in the region. With an estimated capacity of 200 Tbps and a 25-year lifespan, the I-2SEA cable will be a critical asset for the digital economy of India and Southeast Asia for decades to come.