What I Learned This Week

The out-of-favor subsea fiber cable industry is poised for a renaissance boom.  How to invest.

The submarine cable industry was a poster child for the dot com internet boom/bust nearly two decades ago. Irrational exuberance, huge upfront CAPEX, an aggressive wholesale-cable model, uncertain future demand, and a big scope for price wars led to the bursting of the bubble in international undersea cables, highlighted Tim Stronge of TeleGeography in a presentation. An onslaught of bankruptcies followed. Not a single new undersea cable was laid across the Atlantic for 12 years after the bust. Now, the bandwidth glut has evaporated, and the subsea cable industry is facing a potential capacity shortage, reviving demand to lay new cables. Much of the current infrastructure laid 15 years ago…

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