Slattery on the next subsea wave
Fresh off the back of SUB.CO’s announcement about the new Oman and Australia cable (OAC) being built, Jason McGee-Abe speaks to Bevan Slattery about the benefits of the new route and how subsea is becoming increasingly attractive for investment players.
I spotted Slattery at one of the recent receptions at our Capacity Europe in London. The serial entrepreneur is a busy man so I immediately took my chance to go over and speak with him.
We first met at a Superloop party held during Capacity Asia 2016 in Hong Kong. Superloop had announced that its Hong Kong dark fibre network was live and Slattery revealed that work was progressing well on the TKO Express, the first domestic subsea cable linking Hong Kong’s major finance and technology centres, Chai Wan and Tseung Kwan O Industrial Estate. TKO’s installation completed two months later and has since become an integral part of its network.
Back to London and with Slattery’s most recent venture, SUB.CO, fresh in mind and the announcement that it is building a new international subsea cable system that will directly connect Muscat in Oman to Perth, Australia, I suggest a big interview with the serial entrepreneur for this issue. His diary is jam-packed at Capacity Europe so we agree to finalise a call in the weeks after the event. After three weeks, I finally get my chance to speak in detail with him. He’s driving home in Brisbane after a day’s work in Cloudscene’s offices and I’m up in early at home in London.
OAC: Express Connectivity
I immediately ask him about the Oman Australia Cable (OAC) cable and enquire how long the project has been in the pipeline for. “It’s been cooking for about 15 months,” he says.
“It’s an interesting route and provides great connectivity at a time when we’re seeing a surge of bandwidth in the cloud and major cloud providers are reaching further and further out.”
These providers are in more dense metro markets like Singapore, the US and in Europe, but are expanding into more underserved markets like Africa and the Middle East, so the OAC cable comes as welcome news.
Cloud consumption is a key driving force in the industry today and we’re seeing cloud providers expand geographically due to customer demand. “Diverse, secure routes providing scalable bandwidth and international connectivity along a low latency route are needed. This is why we’ve built the OAC. It’s surprisingly the first express route that travels across the Indian Ocean from Australia to EMEA,” he tells me. “We are taking some project risk with this but you always will when you’re first to market with something.”
OAC is the first direct express cable route from Australia to EMEA, so it’ll help support the low latency demands. Designed as a three fibre pair system, OAC has the option to upgrade to four fibre pairs based on demand and will span approximately 9,700km.
“For me, the Oman Australia Cable is the final piece of an important puzzle to improve Australia’s resiliency and recognises the growing importance of Oman in becoming the new “cloud hub” in EMEA,” he adds.
Oman has emerged as a key hub for EMEA and gateway between Asia, the Middle East, Europe and Africa. Muscat also has 15 subsea cables terminating there today and will host a new Equinix facility. Additional branching units have been designed to extend the OAC system into Salalah, Oman, and Djibouti.
“A private equity firm in Australia is backing us and has taken a long-term view on key routes that we think are underserved and will also give good returns,” Slattery adds.
Subsea - the new investment wave
I immediately ask for more details about the private equity firm and ask whether he can disclose its identity. “Not just yet,” he responds immediately but he does reveal that there is much more appetite to back subsea projects.
“We’ve seen infrastructure investment firms, funds, and private equity firms - such as EQT, Digital Colony, Macquarie, and Fidelity – get deep into fibre networks. They all historically went into telecommunications infrastructure and we’ve seen them go into the data centre space now,” he explains.
Slattery believes the third wave of investment will be in the subsea space and that we’ll definitely see investment companies go beyond traditional choices and back submarine assets.
They are a very similar class of asset in the sense that the infrastructure has a long life. Quite simply, long-term customers and long-term assets is an attractive investment,” he adds. “With trillions of dollars of investment flowing in looking for long-term assets, subsea cables are certainly attractive.”
Slattery is approaching this particular subsea project in a different manner though and certainly from a long-term investment aspect.
It is certainly a far cry from the consortium-based model that he was involved in with the INDIGO cable and a big differentiating factor is time to market.
“One of the things that I learnt from the INDIGO cable project was how consortiums can be challenging and slow you down when you’re sharing assets and risk, but in particular when trying to get consensus from all members for a decision,” he says.
In comparison, manufacturing of the OAC is already set to commence in late 2019, with the installation forecasted to complete by the end of 2021. “We’ll be ready for service in early 2022,” he says.
Megaport & Superloop
Slattery’s other companies have also been positioning and preparing themselves in the face of the explosive growth in cloud connectivity and interconnection between cloud regions. The volume of traffic is vast and latency is increasingly becoming a huge part of the conversation next to security.
“Megaport currently has over 600 customers and are in well over 70 markets in over 20 countries,” he says. “Cloud interconnection is exploding and we’re enabling over 530 data centres.” A core focus of Megaport’s roadmap over the next 12 months is helping service providers and enterprises with their global SD-WAN deployments, he tells me.
“Being able to spin up virtual SD-WAN infrastructure to do your aggregation right next to a cloud on-ramp, internet exchange or whatever it may be is very powerful and important to a lot of enterprises and service providers. The beauty is we’re enabling this and helping customers take advantage of this.”
Superloop’s focus over the next 18-24 months is about being fully connected to the cloud and “making sure we’re fully embracing SD-WAN and helping enterprise interconnect on an MPLS or a low-latency IP network across Asia and the world”. He adds: “We’ve built the network and the backbone, are building up the access, so now it’s time for us to turn the heat up and start leveraging the amazing network that we’ve built.”
Superloop has just completed a recapitalisation of the company and budget sheet, he explains. I ask him about the takeover approach from May by QIC Private Capital for AU$494 million and he says “we stepped away from those QIC talks around June”.
The Great Barrier Reef
Aside from his busy portfolio of companies, I ask Slattery what he does in his spare time. He first responds that he has recently been spending time with his daughter who has recently graduated but highlights a particular project close to his hear as he informs me about his passion for the Great Barrier Reef, which he grew up on.
Slattery has a business called Biopixel, which documents natural history and all things about the Great Barrier Reef. The company has created the biggest HD 4K and 8K video library.
“The reason I’m doing that is to help the reef survive and grow,” he says. “To do so, we need to be able to tell a story and the way you tell a story these days is visually. Storytellers like Discovery or BBC can access our content and create their stories.”
He adds that 35% of the David Attenborough documentary on the Great Barrier Reef a few years ago came from the Biopixel soft library.
Slattery has set himself a target of building 1 million sq m of tolerant reef over the next decade. If this project is anything like the other initiatives and companies he has put his mind too, the Great Barrier Reef is in safe hands.
As we go to press, the Slattery Family Trust is also about to launch the Great Barrier Reef census so do take a look if you’d like to find out more.