The Eastern Light Project Resurrected: Optic Tunnels - Part 1

Eastern Light had a very ambitious plan to build a hybrid subsea/terrestrial Nordic ring that included subsea cables linking Denmark to Sweden, Sweden to Finland, and Finland to Estonia. From Estonia it would create brand new fibre paths in the rights of way of the high speed Baltic Rail line all the way down the Baltic States to Poland and Germany. 

The plan was both bold and expensive because the company approach was 'purist': completely new and highly diverse fibre builds both on land and at sea. My own cost estimate was a half billion Euros, which is significantly higher than monster cables like Anjana or Firmina. 

Unfortunately, a creditor ended up seizing the company's assets. The creditor was a Swedish firm specializing in bridge loans for startups looking for equity financing. Generally, telecom infrastructure startups must rely on equity financing where the investors get shares (usually a big percentage and often a controlling interest) in exchange for cash. Banks don't have in-house telecom expertise. So private equity firms dominate funding. The Swedish firm's loan required that equity financing must be secured by a certain date or else they can seize the loan's collateral. In this case that collateral included one finished Finland/Sweden cable as well as a second under construction. That's all I know. I am surprised that the Swedish firm and Eastern Light did not renegotiate the deal because the former has no real expertise in telecom assets. It seems there could have been a better outcome for both parties.

The irony is that Eastern Light's founders did eventually get equity financing; their new company is Optic Tunnels. The photo on the left shows trenching going on North of Stockholm. The map shows the first stage of the the project. The founders realized that really big projects like Eastern Light are much harder to get financed than smaller, bite size projects. I think their vision is still the same, namely a network ring encompassing the Nordics, the Baltics, Germany, and Poland. But they understand now that doing it in discrete steps makes more sense. It is easier to raise funding on a step-by-step basis and each completed project paves the way for the next by greater a track record of success.

The terrestrial network consists of a relatively large five centimeter conduit. The idea is to build a conduit network and then install fibre depending on demand. Obviously a five centimeter duct can accommodate thousands of fibre pairs. This network is designed as pure hardcore wholesale. It will connect data centers and nothing else. There are no splicing breakout points along the way. No lit services will be offered, just dark fibre pair IRUs. There are two key principles guiding the project: physical diversity and massive fibre. I interviewed one of Optics Tunnel's founders, Svante Jurnell, former CEO of IP Only before Global Connect bought it. According to him, ...