Subsea Cables & Internet Infrastructure

 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...

Satellite competes with terrestrial broadband because they are both access technologies. But all satellite networks generate traffic for the terrestrial backbones including the subsea cables. After all, there is little content stored in space! 😃 Hence satellite Internet providers must access data centers just like every other technology in the telecom world. Inter-satellite free space laser communication will bypass the terrestrial backbones to an extent, but this is really just a drop in the bucket. It works mostly for low bandwidth applications like email and instant messaging.  The graph shows the number of objects launched into low earth orbit from 1960 onward. This includes manned space craft, satellites, and unmanned spacecraft. Note that the dominant factor is SpaceX putting Starlink LEO satellites into orbit. As of January 2025, Starlink has 6,932 in space. In addition, Amazon Kuiper is deploying 3,236 LEO birds with the bulk of the fleet flying into orbit in 2025 and 2026...

EU Gives Old Boys Club European Consortium 6 Billion Euros for LEO Every major world power bloc wants its own LEO satellite constellation. The EU is no exception. It has agreed to give a European consortium consisting of SES, Eutelsat, and Hipasat, 6 billion Euros to develop and deploy by 2030 a total of 290 LEO and MEO satellites. Obviously the EU wants the security and privacy of a homegrown communication system to be called IRIS that could back up terrestrial and subsea cables. I understand the impulse. The Europeans face an aggressive Russia and a surveillance happy US government with a President who is more comfortable with dictators than the democratically elected.  At the same time it is clear that there will be glut of low lying satellite capacity in the near future. Starlink has obviously a huge lead over the European project. In addition, marketing juggernaut Amazon began deployment in early 2024 of its 3,236 satellite system. Customer acquisition costs often determine th...