A mammoth task heading for completion

About five years ago I got a call from the guys at Hibernia Networks. The question was simple, would a lower latency connection across the Atlantic attract trading business and who would be interested? While discussing the idea I started to realize the size and complexity of such an undertaking. Five years later  the project is being finalized and the final splice is scheduled for August and the target go-live date is mid September. 

This is not the type of endeavor that comes easily, and it generally takes longer than planned, even for a company like Hibernia Networks experienced in laying these fibers. The initial challenge was getting a business case that worked. Back in the 1990's capacity was simple: build it and customers would come. Today it doesn't work like that anymore, meaning that financing for capacity is raised less easily.

Once financing was raised, new challenges started together with TE SubCom, of surveying, planning and engineering both for the over 4500 km of fiber and back haul. Multiple years and a lots of hard work later the project now named Hibernia Express heads for delivery.

 TE Connectivity SubCom’s Resolute Cable Ship leaving New Hampshire, USA for the Atlantic to lay Hibernia Express

TE Connectivity SubCom’s Resolute Cable Ship leaving New Hampshire, USA for the Atlantic to lay Hibernia Express

The business case does not rely on just traders, if that was the case the project would probably not have been launched. In today's web-centered, bandwidth hungry world there are a number of drivers: Capacity, Diversity, and Latency. Hibernia Express provides flexible capacity and up to 3 times the capacity compared to competing products by providing 10Gb, 100Gb and even 400Gb services. A new route that is completely separated from and independent of existing offerings provides the diversity required by reliable services. And of course Hibernia Express offers the lowest latency across the Atlantic. For these reasons not just traders but also the likes of Microsoft are signing up for their Web and Cloud business.

Attracting trading business by lowering latency is an essential part of the plan. Express will lower the lowest transatlantic latency. The product is well positioned, not just going across the pond but providing back hauls into London and Frankfurt on the European end, and on the American end, New York, New Jersey, and Chicago.  Latency  from Slough to New York can be around or even below 60 ms. The fastest end-to-end solution for a connection between Frankfurt and Chicago with a latency around 74 ms will be among the options.

 Hibernia north, south and express map and back hauls

Hibernia north, south and express map and back hauls

It doesn't take a genius to see uses of a lower transatlantic latency, this applies to some of the text book arbitrage examples. It's likely that some brainpower already has a playbook ready, utilizing this lower latency. Ultra low latency capacity on Hibernia Express is not cheap so it's unlikely to be ordered without quite some thought. Hibernia Express also offers a higher latency service which may be the way to go for many.

At the moment, Hibernia Networks is happy with the service and the sales figures. So no plans to enhance or change the service are in the works. The size and complexity of this type of project also means that no competition is expected emerge any time soon, and competition is unlikely to sneak up on them. Although not confirmed, logic does dictates that Hibernia Networks has some improvements ready or planned to counter improvements applied to competing services bringing them closer. It is a certainty that Hibernia Networks currently has no plans to do a similar play on different routes to Asia for example. So that mammoth task may be an opportunity for others.

What does this mean for you? This greatly depends on your strategies and no general answer is possible. This new link is likely to be a game changer for some traders. And like with all game changers it is wise to consider what this means for your business.