Subsea Cables & Internet Infrastructure

What is amazing is how the EU consistently rewards European companies that failed to anticipate technological change like Eutelsat and Arianespace. Its French executives were too busy with two hour lunches, Bordeaux wines, and crème brûlée to realize that LEO satellites were the future. See the quotes below. 😉 Eutelsat is one of the prime beneficiaries of the IRIS2 project which involves a 330 LEO and 18 MEO constellation that will only cost $18 billion. We all know that Starlink could have done the project for under a billion dollars. A Starlink V3 satellite costs $1.2 million to manufacture and provides 1 terabit download throughput. The point is that the European satellite industry is grossly inefficient. It lacks the economies of scale in production. Hence a Fortress Europe approach to technology is likely to be super expensive. EU procurement often rewards mediocrity because it is trying to create sovereign infrastructure in areas where the Americans dominate and won fair and...

Ooredoo is a multinational mobile service provider with operations in Algeria, Tunisia, Palestine, Kuwait, Saudi Arabia, Qatar, Iraq, Oman, Maldives, and Indonesia. Its 2025 revenues were $6.4 billion revenues. Like many multinational mobile carriers such as Vodafone and Bharti, Ooredoo is becoming an important subsea cable player. Its first noticeable success was winning the competition to host the 2Africa CLS in Oman. More recently, Ooredoo announced in January 2025 the Fiber In The Gulf (FIG) cable that will link Kuwait, Iraq, Qatar, Bahrain, the UAE, Oman, and Saudi Arabia. Due to the short distances between the countries involved, this 24 fibre pair cable is expected to achieve 720 Tbps or 30 Tbps per pair, a Middle East record. The shorter the distance between DWDM optical nodes, the less optical errors accumulate, and hence the greater the throughput. The higher optical power or intensity required for long subsea spans inevitably creates nonlinear errors or optical distortion th...

The 16 fibre pair MVISTA project has the potential to disrupt the cozy world of Southeast Asian telecommunications. The majority shareholder is the Stavian Group, a Vietnamese industrial conglomerate building one of the first carrier neutral data centers in Vietnam. Stavian is a good example of how cash heavy and well established companies are entering the Southeast Asian service provider market in search of their slice of the Good Life. Another example is Keppel, which began life as a builder of offshore rigs after WW2 and today is a very successful asset manager of real estate, infrastructure (power), and connectivity. Companies outside telecommunications are drawn to subsea cables due to the robust connectivity demand in Southeast Asia. This reflects the region's fast growth, but also a fragmented geography. Many countries are islands like Indonesia, New Guinea, Philippines, Singapore or peninsulas like Thailand and Malaysia. The easiest way to build cost effective communication...

Coreweave is a startup AI Data center play. It makes Oracle look downright healthy and athletic. While Oracle's legacy software business generates a lot of cash flow, Coreweave totally depends on external financing in the form of stock sales and debt. Moreover, Coreweave has exactly the same problem as Oracle, namely high customer risk. Coreweave's main clients are Microsoft, META, and OpenAI. Now Coreweave claims to have a $100 billion backlog. But the Devil is in the Details. No contract is valid if Coreweave cannot deliver power, GPUs, and space to fulfill them. And that is exactly the probem. Demand vastly exceeds supply with no relief in sight for years to come. Secondly, it is likely that OpenAI and Anthropic are issuing more compute requests than they actually need given their soft commitment contracts. So if you add up the backlog across all customers, it probably vastly exceeds real demand.  These key fundamental factors are the same as in the case of Oracle. An AI da...

I am seeing a growing number of requests for subsea capacity linking Thailand to Singapore. Thailand is challenging for many reasons. Many consortium members own no fibre beyond the Thai cable landing stations. This leaves them hostage to the country's two main cable landing station operators, TOT and NT, state owned telecom operators, that have exploited their CLS control to charge high backhaul pricing to the carrier neutral data centers.  The country has three key cable landing stations. Sri Racha, just outside Bangkok, hosts ADC, AAG, and some older cables. In the far South, near Thailand's Malaysian border, a large number of cables land at the Songkhla and Satun cable landing stations. Among the more important high capacity modern cables, AAE1, IAX, and MIST land at Satun. SJC2, AAE1, MVISTA, APG, SEA-H2X, and TIS use the Songkhla CLS. As you can readily infer from the map, backhaul pricing from the South to Bangkok is quite high due to the distance and terrain. The terrai...

AI data centers are extremely capital intensive. Indeed, much more than a standard data center due to the power infrastructure, bare metal servers, and GPUs. But whereas most capital intensive industries have low operating expenses, the AI data center has very high operating expenses as many facilities require hundreds of megawatts or in some cases gigawatts of electricity. So this leads to a high capex, high debt business model combined with high operating expenses. Not to mention, low customer switching costs since AI service providers generally just download their data and models into these bare metal servers and estimate them. Hence, the balance of power generally favors the customer, AI service provider, as opposed to the standard data center model where customers incur very high exit costs. The result are contracts with no penalty termination clauses and 60 to 90 days cancellation notice requirements. In Oracle's case all of its free cash flaw has evaporated due to the immens...