Subsea Cables & Internet Infrastructure

The author argues that the stodgy business community is underestimating Amazon's threat to Starlink. Amazon is developing a wholesale model for LEO capacity that dovetails perfectly with its terrestrial network superiority over Starlink. At this point Starlink is pretty much everyone's enemy: "While Starlink also offers business tiers, its ambition to become a global consumer telco makes it a threat to carriers. For a company like Verizon or AT&T, Starlink is a frenemy: a partner today, a predator tomorrow." In contrast, Amazon wants to be everyone's friend. Amazon's dedicated 1 gigabit Ultra terminal will be sold to carriers that will deliver Internet to the premise via 5G connections. In rural Michigan I encountered households whose home routers were linked to the Internet via 5G mobile frequencies. Mobile carriers have found 5G demand to be very weak. Hence their spectrum is underutilized. Here's the solution. Amazon realizes that succ...

Let's be clear. LEO satellite service is an unproven business model. Obviously, if prices are high enough or the service is a monopoly, it will work. But no complete financial picture is public at this point. This is why the planned 2026 IPO is so interesting. The prospectus will reveal enough to make an informed judgment. But despite stubborn optimism to the contrary, there is no strong evidence that LEO Internet is highly profitable. I doubt even Starlink investors have the company's complete financial details except for a few high profile venture capitalists. Starlink does release an annual report. It is best characterized as a slick marketing pitch designed to give the impression that Starlink is an unstoppable juggernaut that reflects historical inevitability. All Bow to Caesar. What are the missing details? 1. Depreciation. 2. Customer acquisition costs. 3. Operating expenses. 4. Capital replacement costs. Depreciation is important because LEOs are like...

 Amazon announced yesterday it is launching its Kuiper constellation service in 2025. The UK will be the first country to go live. Up to now Starlink, which has 4.6 million customers, has faced no competition. But the huge buzz around Starlink is not really warranted. Yes, it is a great technical achievement particularly given that a customer is being handed off from one service satellite to another approximately every 30 minutes. However, what ultimately matters are financial results. Undoubtedly, Starlink is bleeding lots of cash. There is no way one can build a massive network prior to significant sales and avoid it. Satellites cannot be upgraded. So they must be fully loaded from day one which sharply increases the capex. Furthermore, the key metrics determining profitability and net cash flow are unknown. These metrics include customer acquisition costs. The American CLECs mostly went under during the dotcom era because it cost too much to acquire customers. Starlink has also...

Amazon Ireland has applied for a maritime usage license to land a planned cable connecting Ireland to the United States. It is considering landing the cable near Castlefreke on Ireland's Southeast Coast in County Cork along a stretch of beach called the Strand. Amazon has made no public announcement so far. Here is the filed application . I discovered this when I came across a local Irish newspaper that mentioned that Amazon was looking at a nearby beach for a cable landing. I then did a Google search and found the filing. All these filings are posted online and they are 'leading indicators' as economists would say of what is going to happen.  No Trans-Atlantic subsea cables currently land on Ireland's South Coast other than EXA's Express and that is part of the reason that Amazon finds it so appealing. Such a cable would be physically diverse at least on the terrestrial side to the Irish Sea and older Atlantic cables like Hibernia North and South and AC1. I can nev...