Arctic Fibre Acquired by Quintillion Networks

Quintillion Subsea Holdings LLC (“Quintillion”) has acquired the assets of Arctic Fibre as part of a plan to build a submarine fibre optic cable from Asia to Europe with the first phase in Alaska. Quintillion will build, own and operate the network. The founding shareholders of Arctic Fibre hold an ownership stake in Quintillion and Michael Cunningham, the CEO of Arctic Fibre, has joined the board of Quintillion. Cooper Investment Partners, a New York-based private investment firm, is the majority investor in Quintillion.

Figure 8 - Arctic Fibre Cable Map

Source: Quintillion

​The Alaska segment of the project is the first phase of a three-phase project to connect Asia and Europe through the Arctic. Phase two will be constructed from Alaska to Japan, and phase three will connect Alaska to Europe via the Canadian Arctic.

Construction activities are currently underway in Alaska to complete phase one, which includes the installation of a 1,850km subsea fibre optic cable from Prudhoe Bay to Nome with spurs to the Alaska communities of Barrow, Wainwright, Point Hope, and Kotzebue. The Quintillion cable system will make available much-needed bandwidth to these communities by early 2017.

In addition to phase one of Quintillion’s subsea system, a new terrestrial fibre optic cable is under construction and will provide connectivity from Prudhoe Bay to Fairbanks, Alaska. At Fairbanks, the fibre will connect to existing networks reaching Anchorage, Alaska and the Pacific Northwest, providing a fibre link between the continental United States and the Arctic.

Phase two, the Pacific segment, is intended to extend the backbone cable laid off the Alaska coast west, from the branching unit offshore Nome, to Japan with options for additional spurs into Alaska. Phase two will create additional redundancies of service to the System and open new markets for the project.
Phase three is planned to extend the subsea system from Prudhoe Bay, Alaska east through the Northwest Passage, south of Greenland, across the Atlantic Ocean to the United Kingdom with spurs into select communities in the Canadian Arctic. Once completed, phase three will provide multiple redundancies for the System and open additional international markets.

In connection with the transaction, Oppenheimer & Co. Inc. acted as exclusive financial advisor to Arctic Fibre.

Source: Alaska Native News

ANALYSIS: The takeover of Arctic Fibre by local Alaskan operator, Quintillion, has been rumored in the industry for some time but is only now confirmed. In May 2014, Arctic Fibre Founder, Doug Cunningham, said that they were days away from putting their supply contract with TE SubCom into force. In January 2015, financing was still not complete and the system configuration had sprouted an additional branch from the transpacific trunk into Seattle. This kind of "project creep" is often a sign that project management focus has been lost. Mr. Cunningham was also relying on getting financial support from the Canadian government because of the economic benefits that the Arctic Fibre system would bring to remote communities in Northern Canada. This support appears not to have been forthcoming.

Quintillion is a regional Alaskan operator that partnered with Arctic Fibre for landings in Alaska. As the project developed, Quintillion nailed its colors to the mast, promising its customers greater access to bandwidth and lower prices. It could not, therefore, allow Arctic Fibre to fail.

​The focus of the project is now on completing the Alaskan segment of the Arctic Fibre project to deliver on Quintillion's promises. It seems unlikely that Quintillion will have the incentive or resources to obtain funding for the transpacific and transatlantic segments that were originally proposed.