Subsea Cables & Internet Infrastructure

Subco announced recently four new 24 fibre pair cables connecting Australia to Japan, Singapore, Guam, and the Continental US. This is obviously a multi-billion dollar undertaking. Now Subco owns the Oman-Australia and SMAP cables. It is also a consortium member on Indigo West and Indigo Central. So I believe Subco has significant retained earnings. Nonetheless, these new cables together probably come close to the $2 billion construction dollar mark. Moreover, hyperscalers don't buy capacity prior to successful execution. Indications of interest, yes, but not contractual commitments. LOIs are soft commitments. So this is a daring undertaking by one of the most successful private operators on subsea cables. For those new to the industry, a private operator generally is a wholesale player that owns an entire cable as opposed to a consortium member or a hyperscaler. However, the historical track record for private operators has not been great. So far Subco has an exception. By 2001, p...

1. Ellalink connects Europe to Brazil. It offers a unique fibre optic path between Brazil and Europe. It is also much shorter than combining an Atlantic cable with a South American cable or an African cable with SACS or SAIL. Ellalink sharply lowers latency for traffic whose end points are South America and Europe. It adds resiliency as well to the regional telecom ecosystem. Wave costs are over $10K for a 10G and from the upper 20s to low 30s for a 100G.  Nonetheless, it struggled to get private funding because there is simply not a lot of traffic between Portuguese speaking Brazil and Europe. Most South American ISPs can more cheaply and conveniently do their peering and pick up content in Miami. A 100G wave from the Sao Paolo Equinix complex to the Miami NAP is now under $10K. That is a third less than going to Europe via Ellalink to pick up the same content or peer with the same counterparts. In fact, Ellalink should be cheaper than moving traffic from South America to Europe v...