Subsea Cable Investment Opportunities in the Era of Hyperscalers

Altman Solon is the largest global strategy consulting firm exclusively working in the TMT sectors. Following a presentation at our annual London Breakfast, Managing Director Justin Hotchkiss shares his insights on the investment potential of subsea cables in an era of hyperscaler usage. 

2024 began with Google joining the "Humboldt" project—the first subsea cable directly connecting South America to the Asia Pacific region. This story is indicative of a larger trend shaping the industry — investments from hyperscalers are taking on widespread infrastructure projects. Managing Director, Justin Hotchkiss, expands on investment trends in subsea cables, including: 

• Hyperscalers are changing the face of the subsea cable market as they increasingly consume international bandwidth to connect data center hubs worldwide. 
• Continued demand growth is driving up utilization rates on most major global routes which should have a beneficial effect on pricing.
• To successfully navigate the changing dynamics of the subsea sector, investors should develop a strategy that meets the needs of hyperscalers, explores emerging routes, and understands the challenges inherent to a market with intermittent demand and high construction costs. 

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This topic was originally presented at our TMT Private Equity Breakfast in London, an annual event where our experts present trends and investment opportunities shaping the TMT industry.