Subsea Cables & Internet Infrastructure

EXA now owns the Aqua Comms assets. These include fibre pairs on AEC-1, AEC-2, and Amitié. EXA also acquired two Irish Sea cables as part of the purchase. EXA managment emphasizes customer choice in their justification of the deal, but I think what makes it a good deal for EXA is the price. It picked up lots of fibre pairs for a total price of around $40 million. Now subsea fibre IRU purchases often range from $30 million to $60 million per pair on life of system term deals. So this is a great distressed purchase. In the same ballpark as Columbia Venture's purchase of the 360 Networks for $25 million, which was rebranded as Hibernia Atlantic. I think the main question I would pose to EXA's operational staff is whether they can generate cost savings. Operational synergies are important to judging the success of an acquisition. This is where companies often fail in their consolidation efforts. GTT went bankrupt in 2021 after rapidly buying lots of network assets i...

I n 2005 there were 7 high c apacity Trans- Atl antic subsea fibre optic networks connecting North  Americ a to Europe. Flag had two cables, Hibernia  Atl antic two as well, Level3 owned the Yellow cable, Global Crossing had  AC1, the PTTs owned TAT-14,  and  Apollo h ad 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  Amsterd am.  At the time Teli a 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 in...