When looking for a great example of successful and innovative project financing, Seaborn Networks often comes out top of mind, having made history as the first export credit agency-backed project financing of a subsea cable project – Seabras-1. Considering the massive role financing plays in determining the success or failure of a cable project, Seaborn Networks’ story has certainly opened up the discussion on the kind of financing models cable owners and investors can explore when undertaking a new project.
We caught up recently with CEO Larry Schwartz, where he shares his take on trends in project financing, and how the industry will evolve in the future.
Tell us more about yourself (and your organisation)
Seaborn Networks is a leading developer-owner-operator of independent submarine fiber optic cable systems, including Seabras-1 between New York and São Paulo, and ARBR between São Paulo and Buenos Aires (projected ready-for-service Q4 2018). Seaborn’s companies are licensed telecommunications operators in Brazil and the US, and Seaborn provides its own primary NOC manned 24×7 by Seaborn employees in metro New York and a backup NOC in the Boston area.
Seaborn pioneered the first export credit agency-backed project financing of a submarine cable system and built the first direct POP to POP route between the commercial centers of Brazil and the US, thereby enabling a new ultra-low latency route between these markets. Seaborn is also believed to be the only transoceanic submarine cable operator controlled by its management team, leading to faster turnaround times and reduced execution risks.
I serve as Chairman, CEO & President of Seaborn Networks. Prior to entering the subsea cable industry 14 years ago, I served as a Senior Vice President at Genuity. Before that, I led a variety of large-scale infrastructure projects and cross-border acquisitions. I’ve also been a founder, board member, investor and officer of numerous other telecom, marine engineering and technology companies.
In one sentence, how would you describe the state of the subsea communications industry today?
The industry is at a critical inflection point, with a fair amount of self-examination regarding how critical global communications infrastructure should best be developed, funded and operated.
How do you see the industry evolving in the next 5 years?
We expect the number of independent developers trying to lead new projects is reduced as the market better understands the daunting amount of development capital required to be put at risk before CIF.
What do you think is one key challenge facing the industry today? How do you think it can be overcome?
The biggest challenge is to better align the build timeline of subsea cables (often 5 years from idea to RFS) with the build timelines of data centers (typically less than 18 months). The solution lies in moving away from the “musical chairs” process of putting a group of carriers and OTTs together, and instead creating an acceptable framework for all market participants that fast-tracks the project.
You’ll be participating in the panel on “Financing tomorrow’s cables” in this year’s conference, what is one emerging trend that you see happening with regard to the way projects are being financed?
As new market participants are entering the scene to lead projects that once were the purview of large telecom companies, there seems to be a greater willingness to explore new and creative project models.
Why are you excited to be at Submarine Networks World 2017?
It’s a key industry event that comes on the heels of our RFS date for our Seabras-1 US to Brazil cable, and it’s a great time to catch up with our colleagues in the industry.
Larry will be participating in the Project Developers’ Roundtable on 26th September where he’ll share updates on the ARBR project and plans for new branches of Seabras-1, as well as the panel “Financing tomorrow’s cables” on 27th September alongside the following speakers at Submarine Networks World 2017 (25-27 September, Suntec Singapore Convention Centre).
Join him together with over 500 industry leaders at the only annual platform dedicated for the subsea communications community to meet, exchange knowledge and develop new strategies and partnerships.
Keen to learn more? Get in touch with the team: