Subsea Cables & Internet Infrastructure

Coreweave is a startup AI Data center play. It makes Oracle look downright healthy and athletic. While Oracle's legacy software business generates a lot of cash flow, Coreweave totally depends on external financing in the form of stock sales and debt. Moreover, Coreweave has exactly the same problem as Oracle, namely high customer risk. Coreweave's main clients are Microsoft, META, and OpenAI. Now Coreweave claims to have a $100 billion backlog. But the Devil is in the Details. No contract is valid if Coreweave cannot deliver power, GPUs, and space to fulfill them. And that is exactly the probem. Demand vastly exceeds supply with no relief in sight for years to come. Secondly, it is likely that OpenAI and Anthropic are issuing more compute requests than they actually need given their soft commitment contracts. So if you add up the backlog across all customers, it probably vastly exceeds real demand.  These key fundamental factors are the same as in the case of Oracle. An AI da...

I am seeing a growing number of requests for subsea capacity linking Thailand to Singapore. Thailand is challenging for many reasons. Many consortium members own no fibre beyond the Thai cable landing stations. This leaves them hostage to the country's two main cable landing station operators, TOT and NT, state owned telecom operators, that have exploited their CLS control to charge high backhaul pricing to the carrier neutral data centers.  The country has three key cable landing stations. Sri Racha, just outside Bangkok, hosts ADC, AAG, and some older cables. In the far South, near Thailand's Malaysian border, a large number of cables land at the Songkhla and Satun cable landing stations. Among the more important high capacity modern cables, AAE1, IAX, and MIST land at Satun. SJC2, AAE1, MVISTA, APG, SEA-H2X, and TIS use the Songkhla CLS. As you can readily infer from the map, backhaul pricing from the South to Bangkok is quite high due to the distance and terrain. The terrai...

AI data centers are extremely capital intensive. Indeed, much more than a standard data center due to the power infrastructure, bare metal servers, and GPUs. But whereas most capital intensive industries have low operating expenses, the AI data center has very high operating expenses as many facilities require hundreds of megawatts or in some cases gigawatts of electricity. So this leads to a high capex, high debt business model combined with high operating expenses. Not to mention, low customer switching costs since AI service providers generally just download their data and models into these bare metal servers and estimate them. Hence, the balance of power generally favors the customer, AI service provider, as opposed to the standard data center model where customers incur very high exit costs. The result are contracts with no penalty termination clauses and 60 to 90 days cancellation notice requirements. In Oracle's case all of its free cash flaw has evaporated due to the immens...

This article shows that if Starlink deploys a massive network consisting of 42,000 1.5 terabit satellites, it yields only 83 megabits throughput per square kilometer. In contrast, ITU 5G standards require 5 megabits minimum per m2. Most 5G networks aim for 400 megabits throughput per kilometer. Moreover, water covers 71% of the Earth. This means that actual user consumptionn will be a fraction of 83 megabits. This in turn pretty much guarantees massive satellite excess capacity, and consequently, long term price wars as the Chinese, Europeans, and Amazon enter the market. The earth's surface exceeds 500 million square kilometers. Moreover, LEO satellites must be evenly distributed in orbit to ensure global coverage. The result is that a 1 terabit down Starlink satellite does not carry as much punch per kilometer as SpaceX enthusiasts and groupies believe. A 42 petabit (42,000 V3) satellite constellation divided by 500 million square kilometers equals only10 bits per meter.  Doesn...

Hi Everyone,  I am available to help you acquire Layer 1-3 network capacity based on your requirements. In general I don't charge procurement fees because the carriers will pay me for any subsequent sales. So if you work with me and you buy, then you will contract directly with the network operator. This ensures you get the best possible price. My value-added is my knowledge of the operators, market pricing, delivery performance, latency, uptime, commercial flexibility, strengths, weaknesses, and the like. I am also good at negotiating deal terms on your behalf.  In a few cases I take a retainer because the client is looking for long term consulting.  You can reach me at roderick.beck@networksourcing.net. I live part of the year in Europe and also in Africa. 

This 24 fibre pair cable connects Mombasa, Kenya to Oman. It is a joint project of META and Safaricom (Kenya's largest mobile provider). Safaricom is the Mombasa landing partner, but META is the cable's sole owner. ASN is the construction partner. Capacity throughput should be a half petabit per second. Safaricom's participation reflects a long term trend for large mobile operators to enter the subsea cable business. Other examples including Vodafone, Bharti, Ooredoo, Axiata, and their subsidiaries. Subsea cable ownership allows mobile operators to expand operations overseas and also reduce the operating expenses for their international voice traffic. Oman is rapidly becoming a subsea cable hub as it offers an appealing alternative to the United Arab Emirates. The UAE's high cross connect CLS charges constitutes backward protectionism designed to shield its two telecommunication incumbents. Secondly, the UAE is simply too close to Iran to be a good place to land or repa...

AI data centers has two challenges: big capex requirements and high operating expenses due to the skyrocketing cost of electricity and the power intensive nature of GPUs. Another challenge is low customer switching costs. A customer like OpenAI or Anthropic rarely puts equipment into an AI data center. It simply downloads its software into the data center's bare metal servers, estimates its model, and then uploads the estimated model back to its own servers. In Oracle's case, it has only one major customer and hence faces huge customer risk. AI data center contracts tend to be soft and often include no penalty cancellation clauses with 60 or 90 days prior notice. This AI data center business model only works if the vendor has access to cheap electricity like hydropower in the Nordics and lots of  customers as oppose to one or two large ones. Solar and wind power do not generally make the grade because their fully loaded pricing is in fact quite high. In the case of Oracle, the ...