Subsea Cable Supply Falling Short of Demand: Sparkle CEO
AI is increasing the gap between the demand and availability of submarine cable connectivity, Telecom Italia Sparkle CEO Enrico Bagnasco said Monday. Also speaking at International Telecoms Week at National Harbor, Maryland, Chandler Vaughan, associate director of the Virginia Department of Housing and Community Development's Office of Broadband, said pole attachments, railroad crossings and federal land permitting issues remain infrastructure "project killers."
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Dan Caruso, Zayo Group's founder and former CEO, said some federal spending on rural fiber doesn’t make sense, when fixed wireless access and low earth orbit satellites can be cheaper options. While SpaceX hugely dominates LEO connectivity, serious competition will emerge soon from commercial operators like Amazon's Kuiper and sovereign satellite systems of other nations or regions not wanting to rely on SpaceX, he said.
The balance sheets of U.S. fiber operators like Lumen and Zayo remain more anemic than they should be, Caruso said. The valuations of edge providers that rely on fiber networks, such as Amazon and Apple, are massive compared with those of the fiber network operators, he said. That made more sense 15 to 20 years ago, when there were massive investments being made in fiber and numerous operators, but there’s been significant industry consolidation since then, he added. Fiber “need[s] to raise its game a bit.”
Emmanuel Rochas, CEO of France’s Orange Wholesale International, told us there’s a lot of pressure on Orange’s U.S. operations not to use equipment from untrusted suppliers like those in China, and Orange works hard to comply. He said that pressure isn't as strong in Europe, at least for now. Rochas, chairman of the wholesale telecom carriers’ Global Leaders’ Forum, said GLF sees four key trends affecting connectivity internationally: the increased relevance of cloud connectivity; network demands from Generative AI, which will drive big changes in traffic; the emergence of an AI-driven distributed internet; and changing enterprise requirements.
While 5G adoption has been much slower than predicted, it's starting to enable various use cases, such as those involving IoT, Rochas said. Kerstin Baumgart, director-wholesale of Deutsche Telekom's T Wholesale, said there's growing demand in Europe for its own regional data centers and sovereign infrastructure.
Sparkle's Bagnasco said energy availability is increasingly driving where data centers are located, and that in turn is driving the design and expansion of network backhaul infrastructure. There has been talk for a few years of using application programmable interfaces (APIs) to interconnect networks seamlessly, and the willingness to do so seems like it's reaching a tipping point, he said. Rochas said API use opens the door to more inter-operator collaboration and could help fight spam. He said GLF is looking at creating a roadmap for using APIs.
ITW Notebook
Frontier Communications learned many deployment-related lessons four years ago when it emerged from Chapter 11 bankruptcy reorganization and began preparing for more aggressive fiber builds, Chief Strategy Officer Vishal Dixit said. The company found that the biggest challenge is uncertainty, including from unexpected permitting and topography challenges, he said. Frontier now has a system to handle uncertainty better by largely automating decision-making. That has helped keep costs per location stable.
Caruso said that in 10 years, quantum -- in the form of everything from quantum communications to quantum IoT -- will be more prominent in telecom operator discussions than AI is today.