Bulk Infrastructure's Canada/Europe Sovereign Cable Project

Bulk Infrastructure, the Nordic data center and transport player, wants to build a subsea cable linking Norway to Canada for an estimated $620 million. While I applaud Canada for standing up to Bully Trump, this project is fundamentally flawed

1. Most Canadian Internet traffic peers in the US at Secaucus Equinix or in Chicago. It does not go to Europe and the same holds for voice traffic. Most Canadian international calls are to the US. None of this should surprise anybody. Nearly 50% of Canadians live within 100 kilometers of the US border and the two countries are each other's other largest trading partners. Bulk's project has no firm economic foundation.

I worked at Hibernia Atlantic for six years from 2005 to 2011, the only high capacity cable directly linking Canada to Europe. Canadian transport demand to Europe was tiny. European transport demand to Canadian destinations was almost non-existent. Internet traffic between the US and Canada is many magnitudes bigger than between Europe and Canada.

2. The cable maintenance charge would be at least $15 million per year. So the total nominal cost would be $620 million + 25*$15 million or $995 million dollars. This is a high price to pay for dedicated 'sovereign' connectivity between Canada and Europe. Most capacity would lie fallow. The cable would most likely be a welfare child.

3. AI does not change the basic picture. It's true that Canada has plentiful and cheap nuclear and hydro power. The climate is cold. So data center cooling is minimal. But the global AI sector is retrenching with several Neocloud IPOs cancelled, funding drying up, and project cancellations driven by supply chain problems. Moreover, most AI data center customers are US companies so their traffic would go to the US, not Europe. Moreover, while AI infrastructure spending exceeds 1 trillion dollars a year, end user revenues are under $150 million. The sector's viability both short and long term are questionable.

Map of Fibre Optic Subsea Cables Landing In Canada


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