Ireland-France Subsea Cable & Tiger Infrastructure to build IFC-1

Ireland-France Subsea Cable Limited (“IFSC”) today announced a partnership with Tiger Infrastructure Partners (“Tiger Infrastructure”) to finance and construct IFC-1, a submarine fiber-optic cable system that will be the first and only direct subsea cable between Ireland and France. The transaction is expected to close following customary regulatory approval and other conditions precedent. Further financial terms of the transaction were not disclosed.

Figure 14 - Ireland-France Cable Map

Source: www.ifc-1.com

The IFC-1 system will be a state-of-the-art subsea cable and provide ultra-high capacity transmission to telecommunication carriers, Internet companies, and large enterprises in Ireland looking for connectivity to continental Europe.

“The massive growth of Ireland’s data center industry and the requirement for resilient telecommunications infrastructure has created the need for a new, direct route to continental Europe,” said Michael Cunningham, Chairman of IFSC. “We are delighted that Tiger Infrastructure shares our vision and look forward to having them as our partner.”

“We are pleased to be working with IFSC and its experienced leadership team to develop and build this strategic cable between Ireland and France,” said Emil Henry, CEO and Managing Partner of Tiger Infrastructure Partners.

The subsea cable has been designed to extend terrestrially into Dublin, Ireland and Paris, France providing PoP-to-PoP connectivity and enabling long digital line segments. The system is scheduled to be ready for service in late 2018.

Oppenheimer & Co. Inc. acted as the exclusive financial advisor to IFSC in connection with this transaction.
Created by veteran telecom entrepreneurs Michael Cunningham and Douglas Cunningham, IFSC was founded in Cork, Ireland in early 2015 as a single purpose entity to develop a submarine fiber-optic cable system between Ireland and France. The team has decades of experience in the telecom and finance industries and has previously developed other submarine cable systems, such as Arctic Fibre and Antilles Crossing, and other large-scale telecommunications infrastructure projects.

Tiger Infrastructure is an independent middle-market private equity firm that invests in growing infrastructure platforms. Tiger Infrastructure targets investments in the communications, energy, transportation, and related sectors in North America and Europe. Tiger Management L.L.C. and members of the Ziff family are significant investors in Tiger Infrastructure.

Source: IFSC Press Release

ANALYSIS: The business case for this system is strong. Not only is there strong demand growth from the IT and other sectors in Ireland but there is a need to provide route diversity for transatlantic cables looking to reach the European mainland.

Moreover, the Cunningham Family can lay claim to a track record in the submarine cable development space although Doug Cunningham's last initiative, Arctic Fibre, has been taken over by Quintillion and appears to have been significantly downsized. Indeed, with Mike Cunningham fronting this new project, one wonders whether Doug is in semi-retirement licking his wounds, or whether he is planning his next major cable initiative. Mike is a steady businessman with a strong financial background. Hence, the early announcement of funding.

However, the Press Release indicates that other conditions precedent must be met before the funding from Tiger Infrastructure becomes available. This is likely to include a requirement to prove the business case with pre-sales of capacity. This is always a difficult objective to achieve but it seems likely that content providers and the submarine cable owners that land in Ireland should be interested in this new route. There will also be demand from French carriers for connectivity to Ireland. The success of pre-sales will depend on finding a structure that works for both sides and a price that is low enough to justify early commitment without collapsing the market.​