Deep Blue Cable is the developer, owner and operator of a subsea fiber-optic system providing connectivity across the Caribbean islands and to the Americas. When completed in 2020, the system—to be built by TE SubCom—will span nearly 12,000 km, with initial landing points in 14 regional markets and dual diverse landings in the U.S. It also plans to extend the subsea network to Colombia and Panama, and to add more landing points throughout the region. Below, CEO Stephen Scott shares his thoughts with WJI about the evolution, from concept to reality.
WJI: What made you decide that Caribbean fiber-op-tic connectivity was lacking to the point where it made sense to launch a subsea cable system?
Scott: Primarily Digicel, a very substantial Caribbean based company that has off island data capacity requirements but not the benefit of choice. The region is dominated by a monopoly provider, Cable and Wireless. I discussed the need for more attractive pricing with Denis O’Brien (the chairman of Digicel), and we agreed that the region could take a significant regional competitor. Digicel had considered doing just that, but O’Brien believed it would be better to establish an independent submarine cable company to build and operate the system. We saw the two halves of the solution: O’Brien became the Deep Blue equity investor in the venture, and Digicel would be a significant anchor client.
WJI: If the conditions for this opportunity had existed for a considerable time, why hadn’t Deep Blue or some other company not pursued this concept before?
Scott: The Caribbean is quite an old battleground of cable systems that never got developed. In terms of getting something financed or becoming financially viable, certainly from an equity standpoint, it requires a substantial commitment to purchase capacity in advance of construction. So, in that particular region, without Digicel’s support and specifically O’Brien’s support it would be unlikely that this would ever get started. This is a business, no mistake about it, but this project being viable is more than that. I’m personally very interested in the region. There are approximately 40 million people who live on the islands in the Caribbean, and they are served with capacity. But, put simply, there’s not enough choice and it’s too expensive. What we are doing will have a profound impact, not only on the communications ecosystem of the Caribbean, but also on the economic growth potential of an underserved region. When I look at this area, I see an underserved part of the world where there are low GDP countries, but I also see countries with a ready workforce with a good level of education and multiple language skills. These countries are working hard to attract outsourcing businesses and related investment but a lack of new telecom infrastructure and competitive capacity rates is impeding this progress. Deep Blue can make a difference here.
WJI: How extensive are the logistics for this system, both financial as well as technical?
Scott: Without equity to get started, you literally can’t get anything off the ground, whether it’s data centers or telecoms networks or a subsea cable system. So, when you have an equity partner, and a substantial anchor tenant or anchor client, you have a real opportunity to execute. Once again, in this region you have limited choice. There are a number of cable systems, some of which are newer, some are very much older, but it’s a bit of a patchwork quilt. And you can see without too much analysis how you could weave a new system into that region where it can be disruptive to the status-quo and ultimately be financially successful, given the increase in demand for capacity and existing aging systems. The submarine cable world is pretty brutal when it comes to the technology. You install systems, they last for about 20 years and then they either stop working or newer systems are constructed with a significantly reduced operating cost on a per gigabyte basis. Most people understand that aspect, but what is less known is that over time a company can lose the support they need from construction partners that no longer want to maintain or support electronic components that are older than 25 years. The cost to continually operate these cable systems becomes pretty excessive. Lastly, 20 years ago we were installing systems that had 8 x 2.5 gigabyte channels. We’re now running trials and systems with 64 x 100 gigabyte channels and with other trials underway for 40 terabit channels. The amount of capacity you can get down a single fiber pair has grown enormously, which means the newer systems will always be more cost-effective than the older systems.
WJI: When it came to choosing the specific fiber, which did you choose and why?
Scott: The exact fiber type has yet to be decided upon. To some extent, we will be guided by our dark fiber clients, some of whom have specific requirements.
WJI: Once you confirmed the system need and secured your anchor customer, how did the logistics work?
Scott: It starts with the original network design. Deep Blue Cable CTO Alasdair Wilkie worked for Digicel specifically on this project, along with Nigel Bayliff, who completed the initial design and has since gone on to become the CEO of Aqua Comms. I spent a fair amount of time in my first quarter working with Alasdair on a significant system redesign that would meet Digicel’s needs. That was no small task as Digicel operates in 28 islands and countries in the Caribbean and we needed to satisfy its performance and reach requirements. We worked very closely with the lead construction partner, TE SubCom and separately, we recruited a senior team in St. Lucia where we’d set up our project office. These guys are real industry experts in particular subject areas, including permitting, legal, marine engineering, and terrestrial and cable landing station planning. We began work on an Engineering, Procurement and Construction (EPC) contract with TE SubCom where our role is project oversight in the construction period. Nevertheless, in Phase I, there are 22 landings and subsequently, 22 challenges. These can be complex, and we need to make sure we get each one of them right. Some challenges are purely technical, but there is another element that makes it far more testing: the tapestry of regulatory and sub-regional rules that each island has with regards to licenses and permits to land and operate. You’ve got to satisfy their internal regulatory requirements as indeed you have to satisfy the U.S. regulatory requirements to land and operate there. People think about subsea systems and they think about thousands of kilometers of cable, but we think about the landings. TE SubCom has delivered tens of thousands of km of cable every year for decades. There’s little new they need to learn about installing submarine fiber optics, and having such confidence in them is crucial. For us, it’s all about the landings. I’d say that represents 90% of our focus. Once those are done, tethering the submarine cables pieces is relatively straight forward.
WJI: How did you select the initial markets and landing points?
Scott: First, we knew we had to support the Digicel requirement and build out to every significant Digicel market. The second thing was to look at whatever markets existed that we thought over the coming years were going to be underserved. That took us to Panama and Colombia. The rest of the cable system comprises two rings if we take into account Southern Caribbean Fiber, a system serving the windward and leeward islands. On the western side, there are the large markets: Curaçao, the Dutch Antilles, up to Jamaica, the Cayman Islands, Haiti, the Dominican Republic, and the British Virgin Islands, as well as a number of other smaller islands, including Turks and Caicos. So, the basic plan is the big trunk routes branch off to these islands. If you think about a network, it’s trying to get data or serve data between two points. Essentially, and for the bulk of the Caribbean, it’s Internet capacity connecting to Florida. Overall, there are great number of different requirements, and the more you peel back the layers, the more you find. Now you can’t design a system that’s going to cater for every possible circumstance, but you need to anticipate the requirement looking out for 10 years.
WJI: How do you approach route surveys?
Scott: With all the cable systems that have been deployed, the Caribbean has been very well surveyed. What we do is start off with rough diagrams and designs that are fairly angular, an impressionist artist network. You then do a desktop study, which is based on data we already have available from public databases, on how you would design that system to consider submarine structures, to navigate deep and shallow water, to avoid Department of Defense restricted areas, etc. This study is very sophisticated, and at the end you generate a rough order of magnitude price for the system that includes basic components, landings and the landing station, from which you can develop the cost within plus or minus 20%. That may sound like a big range, but at this stage we consider it a starting point. Next, you carry out your terrestrial work, which is a survey for all the anticipated landings. Again, there are a lot of variables and considerations. Can you land on a particular beach or at a particular seawall? Has anyone else landed there? Do you need to do any horizontal drilling? Do you need to manage long distances or very shallow water, because that makes for a very problematic landing. All that and more gets considered. You also need to know where exactly you want the cable to land and what the backhaul would look like, how it will get to the capital, or to the next biggest city, or to a data center. Then once you’ve finished, out of necessity you will have moved some of the landings around. You then go and refine the plan, and from that comes a much more sophisticated pricing exercise, or a fixed price contract where a supplier will lock down its price. Permitting and licensing has to be built into that because we may find there is part of an island that we can’t land at due to environmental or ecological issues. Or, there may be some major construction. When the deep and shallow water surveys are complete, you are confident of the route within a meter or so of where you’re going to install the cable. You need to know where you will bury the cable, where you may need to trench first before you can lay that cable, where you want to do a “post-lay” burial, subsequent to the cable laying, where there are other cable crossings, so you can map it and make sure you have any and all permissions done well in advance. All the above are aspects one has to account for in a marine survey to install a subsea cable. It provides a completely locked-down route.
WJI: How would you describe the Deep Blue cable project timeline? Is it more aggressive or standard when compared to other systems?
Scott: Even a basic system from conception to installation requires a number of years. Nothing happens quickly down in the submarine space. That said, with sophisticated modeling techniques you can anticipate well in advance when the system is going to be required. If it’s not needed right away, then hold off a couple of years because it will take a lot of shelf life once it’s down there 20 to 25 years, although some systems are running a little longer. I think systems being installed now will probably run longer. The technology has really jumped in the last 10 years. For Deep Blue, from first conception to lighting up will have been about five years, given that it was first conceived at Digicel. I think for a system of this level of complexity, it’s about right. The thing that can take the most amount of time, to make sure you get absolutely right, is the landings. The rest, by comparison, is more straightforward. With 22 landings planned in Phase I, I think that makes the Deep Blue cable the most ambitious subsea fiber optic system in the world today.
Article originally published in WireJournal, February 2018