The Atlantic: Aquacoms

In 2005 there were 7 high capacity Trans-Atlantic subsea fibre optic networks connecting North America to Europe. Flag had two cables, Hibernia Atlantic two as well, Level3 owned the Yellow cable, Global Crossing had AC1, the PTTs owned TAT-14, and Apollo had two. In most cases the cables landed in either Ireland or the UK with most traffic destined for downtown London telecom hotels like the various partitions of Telehouse London (East & North at that time). London was Europe's key telecom hub. The other two important hubs were Frankfurt and Amsterdam. At the time Telia Carrier was buying 10G waves 60 Hudson to Telehouse East for $38K a month. But that did not last long. 

There was chronic excess capacity due to zombie subsea cables. In most industries if rates of return are depressed, firms exit the industry with their assets sold to be used in other sectors. Consequently, the industry produces less and prices rise pushing up cash flow margins. Not so in telecom. A subsea cable has no real alternative uses. So distressed assets are recyled via purchases by other telecommunication carriers or by investment funds. In the case of 360 Networks, this one billion dollar subsea cable went bankrupt in 2001 and Columbia Ventures scooped it up for a mere $25 million. It was renamed Hibernia Atlantic. So industry network capacity did not decrease and this set the stage for falling prices which eventually brought those $38K 10G waves down to their current $800 to $1300 MRC range. 

Aquacoms launched the AEC-1 cable in 2016 with four fibre pairs designed to do 13 terabits each. The cable was native 100G and brought a lot of Layer 1 capacity onto a market already burdened by chronic excess capacity. AEC-1 is a low latency cable that clocks 67.83 ms RTD between NY5 Secaucus Equinix and LD4 Slough Equinix. It lands near NYC, but houses its submarine termination gear at 1025dsf Connect, a Long Island carrier neutral data center. On the European side it lands on Ireland's West Coast. It goes terrestrially to Dublin, then hops on an Aquacom Irish Sea cable for the final journey to London. I believe the timing of this deployment was poor. The money behind it got caught up in the hype about exploding bandwidth demand ignoring the steady 10G and 100G pricing declines. If pricing was analogous to a rock slide, AEC-1 turned it into avalanche. Microsoft was its anchor tenant and that deal was probably very thin given that the buyer was David Crowley, known for tough negotiating. Aquacoms followed up with a second cable, AEC-2, that linked the US to Denmark with branches to Ireland and Norway. Strictly speaking, AEC-2 is a consortium consisting of Meta, Google, Bulk Infrastrastructure, and Aquacoms, which operates the four fibre cable. Initial aggregate design capacity was 108 Tbps. The cable offers a unique route across the Atlantic, but it is not clear there is really enough wholesale demand given that Facebook and Google have secured their own capacity on it. Beautiful physical diversity, yes. Good returns? Doubtful. 

Aquacoms has experienced senior management turnover suggesting dissatisfaction on the part of the infrastructure fund owner. Rumors suggest that it is believed to be worth less than previously estimated and the bet on the telecom street is that EXA will buy it in order to consolidate the Atlantic, stop price erosion, and gain economies of scale.