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...

I've been in telecom since 1992. This qualifies me as an 'old fart' or 'dinosaur fossil' as American teenagers would say. This means I've seen every mistake made by subsea cable capacity owners. 1. Buying lots of capacity between cable landing stations, but owning no fibre from the CLS to the customers' destinations, namely the popular carrier neutral data centers. You can't be competitive if you must buy 100G or 400G metro waves from a UK landing station to Slough Equinix. Lease a dark fibre pair ring and light it with DWDM. Don't be penny wise and pound foolish. Those network investments will dramatically improve operating margins. The amazing thing is that PPT members of cable consortiums make this mistake all the time. If it is worth spending $55 million for an undersea fibre pair, then it is worth adding a couple million to the pot for back haul IRUs. 2. Refusing to extend the network to new locations unless the order achieves an investment thre...