Meta Platforms Inc. (META) plans to invest over $10 billion in a new proprietary subsea cable network spanning more than 40,000 kilometers. This initiative aims to connect key global regions, including the United States, South Africa, India, and Australia. The network is designed to improve internet connectivity, especially for underserved and unserved areas, and bolster Meta’s control over infrastructure critical to its platforms: Facebook, Instagram, and WhatsApp. These platforms account for approximately 10% of fixed and 22% of mobile internet traffic.
Project Details
• Route Plan: The subsea cable will form a “W” shape, starting on the East Coast of the U.S., extending south to Cape Town, eastward to Mumbai and Chennai in India, southward to Darwin in Australia, and back up the U.S. West Coast.
• Operational Timeline: Expected to go live by 2025, though delays are possible due to high demand for specialized cable-laying ships.
• Impact: This project could enhance global connectivity, complementing similar investments by tech giants like Google, while also exposing Meta to potential risks, including cost overruns and regulatory challenges.
Risks and Warnings
GuruFocus has flagged four warning signs related to META, underscoring financial or operational risks tied to such ambitious ventures. These may include regulatory pressures, competition in the subsea cable sector, or logistical hurdles.
Context and Competition
Subsea cable investments are becoming a focal point for tech companies like Meta and Google, as these networks are essential for improving data transmission, reducing latency, and ensuring service reliability in an increasingly connected world. While these initiatives promise substantial benefits, they also require careful navigation of logistical, financial, and regulatory challenges.
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