Subsea Cables & Internet Infrastructure

James Jun and his partners are classic American telecom entrepreneurs. They have built street vaults in Boston for cross connects. Carriers meet in the street to connect their networks for one time fees and an annual service charge. Their company was an ISP (Towardex) that transformed itself into a local infrastructure provider by building a dark fibre ring including conduits and these cross connect vaults. It is a powerful combination because customers can get dark fibre but also do mass cross connects using fusion splicing for one time fees. For example, carrier X can directly cross connect to carrier Y in the vault robbing the data centers of recurring cross connect revenue. Note the pristine condition of this under-the-street vault for interconnection. Clean, well organized, and no flooding.  The street vault is directly connected to the major carrier conduit systems. Each plastic cover on the wall above is a conduit. Large carriers often require huge number of cross connects. ...

The beauty of publicly traded telecom infrastructure companies is that they cannot shroud their business in secrecy. Below is a very high level breakdown of Equinix revenues over the last several years. In 2023 the company got $1.9 billion from interconnection, which is its euphemism for cross connects. It comprised 19.4% of 2023 revenues. I must confess I am bit puzzled by how slowly the cross connect revenues are growing because Equinix offers no volume discounts (in Europe even big long haul carriers get only a few Euros off) to anybody. Moreover, Equinix is indispensable in many cities like Zurich, London (Slough, UK), and Amsterdam (AM5 is the best single peering point in the city). A 3Q2024 investor presentation says the company has 478,000 total interconnections. Let's assume each is a cross connect. That implies $3,974 USD per year or $331 per month, which seems too low. I invite readers to comment if they have an idea of what explains the discrepancy between the standard $...