The Barracuda Fibre Optic Subsea Cable Project

Teset Capital is financing a $100 million, 12 fibre pair cable directly linking Valencia, Spain to Genoa, Italy. The network includes POPs in Madrid, Valencia, Genoa, and Milano. It is a remarkably high capacity system designed for 32 Tbps per fibre pair. This implies a 384 Tbps aggregate transmission rate. The cable will land at Sparkle's Genoa CLS and also at a carrier neutral CLS in Valencia. This cable is part of a bigger project. Teset along with two other investment groups own both the Barracuda cable and the affiliated Valencia Digital Port Connect Project. The latter includes the Valencia cable landing station as well as a nearby data center. 

A social media post suggests that Sparkle has acquired fibre pair capacity on the wet segment. It also suggests Sparkle is providing or selling back haul services. Details are important. If Sparkle is providing lit Layer 1 services to Madrid and Milano, then the project is unlikely to be successful. End-to-end cost will simply too high to make pricing attractive. If Barracuda owns its backhaul to Madrid and Milano either via titled fibre or an IRU, then the project has a better chance of success. 

The sales pitch for buying capacity on this cable is quite simple. Traffic arriving in Spain from South or North America or Africa can reach Italy and Central Europe more quickly as the route is far shorter. The other key advantage is that the route is diverse to the terrestrial coastal paths connecting Spain to Italy and Central Europe. 

I don't have a good feel for whether this project will be successful. Both 2Africa and Medloop already link Spain to Italy via Barcelona and Genoa landings as well as a branching unit into the all-important Marseille hub. Price competition could be quite fierce. Medloop, Barracuda, and 2Africa total over 1.2 petabits of capacity. Medloop is 720 Tbps, 2Africa 180 Tbps, and Barracuda 384 Tbps. The management team has strong technical credentials, but this is clearly their first rodeo and although Sparkle was probably the path of least resistance, I think there are more dynamic and flexible business partners out there such as EXA or EUNetworks. Nor do I see anyone in senior management who has sold a wavelength or cut a capacity deal. The senior team looks quite weak on the sales side. 

The project is expected to go live in three years and it is designed as an open cable offering IRUs on spectrum and dark fibre pairs. Their website's emphasis on the possibility of buying IRUs suggests management wants to return capital to the shareholders relatively quickly.

Map of the Fibre Optic Barracuda Subsea Cable Project


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