Cinia moves full speed ahead with Arctic Connect

Cinia moves full speed ahead with Arctic Connect

30 August 2019 | Natalie Bannerman

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Last year Capacity reported that Cinia was embarking on an ambitious cable project, Arctic Connect, 18,000km system still in development stages that will connect Europe, Asia and the US.

Once built, the $700 million cable will offer capacity of between 10 to 24Tbs per-fibre-pair, with a total of 6-8 fibre pairs and branching units to connect various landing points along its route.

At the time Capacity spoke to Ari-Jussi Knaapila, president and CEO of Cinia, but giving us an update this year at the Subsea EMEA in July was Aki Uljas (pictured above), business development director and Eeva Liljanto, director of international sales at Cinia.

The most recent announcement in early June 2019 is the Memorandum of Understanding (MoU) that the company entered into with MegaFon for Arctic Connect. Speaking to Uljas, the deal marked a major step-change in the project with the participation of a leading Russian carrier.

“We’re not in Russian territorial waters with the cable but we are in their continental shelf, so you can’t do this project without the Russians,” he explains. “The purpose of the MoU is that we will establish the project company, our joint venture with MegaFon.”

“MegaFon are the second largest and one of the most interesting players in the Russian telecommunication market at the moment,” he adds. “They have more than 200,000km of fibre network, 69,000 base stations and have won the Ookla Speed Test for mobile networks, for the third year in a row. So it’s a major player in the market.

Having MegaFon on board has been a complicated task says Uljas, so securing MegaFon has been a huge accomplishment. 

“It was a big task convincing the Russian players that this is actually not competing with their terrestrial business. It’s complementary – as it’s serving a different market,” Uljas says.

“Yes, and actually, it could create an interesting ring to support their network, if you look at the Arctic and its terrestrial links,” adds Liljanto.

One of the biggest drivers behind the Arctic Cable project according to Uljas has been new connectivity and route diversity. Although the system has some latency benefits that’s not where the emphasis is being placed.

Although neither Uljas nor Liljanto are downplaying the potential for new business opportunities once the system goes live.

“When we have built this cable, Europe is going to be one hop away from Asia. So I think that will open up lots of new business opportunities.” says Uljas. 

“Since we started working on this initiative, there’s been quite a large interest from the Asian market,” adds Liljanto.

As a part of the One Belt, One Road initiative, the two share that China Telecom has expressed in the news that it is heavily interested in the Arctic Connect cable system.

Though regional specialists, there are a number of unique challenges that come with building a cable in the Arctic from a technological perspective – namely ice.

“We have a lot of ice management,” says Uljas. “We have at least about 3,000km of ice to deal with. There is multiyear ice and seasonal ice. Multi-year ice is ice that has survived at least one season. Seasonal ice varies every year and more easily navigable, allowing operating mostly in open waters Now that operating season starts approximately in July.”

The company works alongside the Finnish Meteorological Institute, which assists Cinia with global ice predictions and forecasts how things will change in the future.

“Also Arctia, which is the Finnish ice-breaking company, have been sailing through both the Northeast and Northwest Passage. So they have a lot of knowledge on what actually has been happening there, what kind of capabilities you need to have operating over there,” he explains.

Attendees at this year’s Subsea EMEA event in Marseille, one the big topics this year was the growing interest the Nordic region from a connectivity perspective. As a company based in the region I was curious to know why they thought this was.

"Having data centres in the Nordics, has less environmental impact. I think that’s really the key issue,” says Uljas.

He explains that in warmer climates you have to use water to cool down the chiller, which is not an environmentally friendly way of cooling your data centre especially considering the wastage?

“I like to think of all data centres like heat transformers," he says. "You put electricity in and you get heat out. In Finland and in the Nordic market, there’s actually a market for the excess heat. We can heat housing; we can heat the water.”

“We have actually some energy companies in Finland who already use the excess heat from the data centre for other things,” adds Liljanto (pictured below).

“I think the environmental organisations are starting to look quite deeply into the data centre because they’re consuming a lot of energy,” Uljas says.

As a solutions provider, Cinia benefits from a unique relationship with the carriers and OTT players, a relationship that Uljas says is no different than the one carriers have with each other. And that OTTs are keeping the market alive.

“OTTs are somewhat dominating. But then again, I think they are enabling the growth at the moment. We have a lot of new development, partly thanks to them.”

One possible model for future development, according to Uljas, is public-private partnerships.

“I think public-private partnerships with OTTs also on board might be the way forward. So you need to have the government as well as the carriers and the OTTs,” he says.

With the Arctic Connect cable only just entering the stage of becoming a fully-fledged project, there is undoubtedly a long road ahead for the company.

“The roadmap right now is to launch the desktop study, which is needed for permitting. We hope to complete by September so that we could actually start the permitting, which takes about nine months."

“This is a completely new project, which nobody has done this before, so we should not be in a huge rush completing this," he adds. "If we need to push it one year further, that’s totally fine, because there are so many things that need to be taken into account that we should not rush into things.

When it comes to Cinia’s existing networks such as the C-Lion system, connecting Finland and Germany, the arctic cable raised added interest towards Finland in general.

“So we are of course trying to capture that business opportunity to run up more customers on C-Lion” explains Liljanto.  “We are extending our network to Sweden, so we then have an opportunity to also provide a diverse route from Finland through C-Lion via Sweden to Europe. So we are currently offering our services through our own platforms in Frankfurt, Hamburg, Amsterdam and soon in Stockholm as well.”

But that’s not all the plans for Cinia in the subsea space, since the success of C-Lion1, Uljas shares that the company is “looking at opportunities of adding another cable as well in the Baltic Sea.”

Interestingly as our interview draws to a close Liljanto mentions the opportunity for Cinia to offer services as part of its offering, a type of ‘one-stop-shop’ so to speak.

“We are partnering with the Russian carriers and we have interconnects at the Finnish-Russian border,” she explains. “This enables us to support customers who want connectivity to Russia or through Russia to Asia and vice versa.”

“From a technology perspective, through our C-Lion system, we provide dark fibre, Layer 1, Layer 2 and Layer 3 services. From a capacity perspective we have seen a growing demand for larger bandwidths. And the demand for the latency benefit that our direct route between Central Europe and Northern Europe through C-Lion1 offers for example to direct cloud connectivity, Edge network sites and for multiple other use cases."