Quantum Communications: Preparing for an Era Where Breach Identification Takes Over 200 Days [A.T. Kearney]

A.T. Kearney Co., Ltd. (Minato-ku, Tokyo, Representative in Japan: Takefumi Harigaya) has published a white paper titled "Quantum Communications - A Major Step Change for Security on the Way," examining the changes quantum communications will bring to security.

This paper outlines that the implementation of quantum communication networks has already begun, post-quantum cryptography (PQC) is starting to move as a practical option to prepare for decryption by quantum computers in the near future, and while quantum key distribution (QKD) is designed to detect the presence of eavesdroppers, it involves physical implementation constraints such as dedicated fiber optic lines.

While current communication networks are largely secure, they are not unbreakable. This paper states that the average time to identify a breach exceeds 200 days, and the average cost associated with a single data breach is over $4 million. With the increasing number of connected devices and the volume of data, organizations in both the public and private sectors need to start considering how to protect their data with quantum communications for the next decade and beyond.

1. By 2029, approximately 39 billion IoT devices; potential market for quantum communication tools to expand

According to the paper, the number of connected IoT devices operating worldwide could reach approximately 39 billion by 2029, up from 15.7 billion in 2023. Furthermore, the volume of data generated, replicated, captured, and consumed globally is projected to increase from 120 zettabytes in 2023 to 181 zettabytes by 2025.

Regarding this change, the paper suggests that as the number of connected devices transmitting data continues to grow, the potential market for quantum communication tools could eventually become enormous. Encrypted data such as personal information, financial data, and trade secrets may still hold value even 10 years from now, making it crucial to identify critical systems that need protection today as the first step toward a quantum-safe future.

2. Breach identification over 200 days, average cost over $4 million; PQC is an "implementable now" option

The paper points out that some successful attacks go undetected for months, with victims unaware of the breach. Currently, the average time to identify a breach exceeds 200 days, and the average cost associated with a single data breach is over $4 million.

To address this new threat, the U.S. National Institute of Standards and Technology (NIST) and other organizations in China and elsewhere are developing standards for post-quantum cryptography. The paper positions PQC as a practical approach that develops protocols and algorithms operable on both quantum and classical computers, making it implementable now to protect data from decryption by future quantum computers. In February 2024, Apple announced its adoption of the post-quantum cryptography protocol PQ3 for iMessage.

Meanwhile, QKD is designed to detect the presence of eavesdroppers attempting to intercept communications by using the inherent properties of quantum mechanical systems to generate and distribute key material for cryptographic algorithms. However, because QKD uses its own communication method at the physical layer, users need to lease dedicated fiber optic lines or prepare physically managed free-space transmitters. The paper also notes that for these reasons, the U.S. National Security Agency (NSA) does not currently endorse the use of QKD for protecting communications in national security systems.

3. QKD examples include 2,032km terrestrial link, 805km leased segment, and 800Gbps support development

According to the paper, the longest QKD network currently exists in China, with a terrestrial link between Beijing and Shanghai spanning 2,032 kilometers (1,263 miles). Banks and other financial institutions are already using this for data transmission. In 2017, China launched the Micius satellite, enabling intercontinental QKD-protected video conferencing between Beijing and Vienna.

In the United States, major telecommunications carrier Verizon is piloting a QKD network, and Quantum Xchange is proceeding with building a QKD network by securing access to a 500-mile (805-kilometer) fiber optic cable running along the East Coast. JPMorgan Chase is developing a QKD network that is resistant to quantum attacks and can support data rates of 800Gbps, demonstrating the ability to instantly detect and defend against eavesdroppers on this quantum channel.

In Europe, QKD is expected to be one of the first services used by EuroQCI (quantum communication infrastructure). In June 2019, 26 EU member states agreed to collaborate, with the support of the European Commission and the European Space Agency, on the development of quantum communication infrastructure to protect the EU's cryptographic systems and critical infrastructure from current and future cyber threats. The goal is to launch initial operational services by 2027.

- About the White Paper

Title: "Quantum Communications - A Major Step Change for Security on the Way"

URL: https://www.jp.kearney.com/issue-papers-perspectives/quantum-communications-a-major-step-change-for-security-on-the-way

- Supervisors

Kakuya Nishikawa, Senior Partner

Graduated from the Faculty of Engineering, The University of Tokyo. Joined A.T. Kearney after working at a patent firm. Supports M&A strategies that create demand by adding new technological axes to current ones, and the creation of new value (business models, operational models) leveraging IoT.

Kiyoshi Takei, Principal

Completed MBA at MIT Sloan School of Management. After working in the corporate planning department of Toshiba's (now Kioxia) semiconductor business, engaged in business strategy formulation and negotiation with overseas companies, then joined KEARNEY. Handles themes such as corporate strategy, business portfolio transformation, new business development, and M&A strategy, primarily in the telecommunications and high-tech fields. Capable of leading cross-border projects. Member of the Ministry of Economy, Trade and Industry JAXA Subcommittee.

- About A.T. Kearney

A.T. Kearney (global brand name: Kearney) has been a trusted partner for over 100 years as a leading global management consulting firm, serving over three-quarters of the Fortune Global 500 companies and government agencies worldwide. With offices in over 40 countries, our greatest strength lies in our people. Upholding "Impact, First," we tackle our clients' most difficult challenges with original thinking and execution, driving transformation together. We entered Japan in 1972 and provide integrated support from strategy formulation to transformation execution for leading companies across all major industries. For more information, please visit our website. https://www.jp.kearney.com/