Meta’s Project Waterworth

Project Waterworth is a major turning point for the global telecom industry, especially for wholesale providers. Meta’s decision to own and control a 50,000 km subsea cable outright signals a shift in power dynamics that could disrupt traditional telecom revenue streams. Here’s what it means for different players:

1. Wholesale Disruption

Historically, subsea cables were built via consortiums of telecom operators sharing costs and capacity. With Meta taking full ownership, they eliminate intermediaries and can monetize traffic directly, potentially bypassing traditional wholesale providers. Expect major pricing pressure on existing routes, especially for telcos reliant on international bandwidth sales.

2. AI, Cloud, and Data Center Integration

This isn’t just a connectivity play—it’s a strategic infrastructure move for Meta’s AI and cloud ambitions.

• India is a key AI growth market, and direct control over subsea infrastructure means lower latency, higher performance, and more secure data routing for Meta’s AI training and cloud services.

• Expect hyperscalers (AWS, Google, Microsoft) to accelerate similar investments in private subsea routes.

• Data center operators in key markets (Brazil, South Africa, India) will see increased demand for interconnection with Meta’s infrastructure.

3. Security & Sovereignty Concerns

Governments are already wary of Big Tech controlling critical infrastructure.

• Regulatory scrutiny will increase, particularly in markets sensitive to foreign-controlled data flows.

• National governments may demand landing rights oversight, impose data localization laws, or push for mandatory partnerships with local telecom firms.

• Cybersecurity risks: Meta will need to convince regulators that its cable isn’t a security vulnerability (or a monopoly concern).

4. How Telcos Must Respond

Telcos can’t afford to sit still. Some key strategies include:

• Diversify routes and partnerships – Invest in alternative subsea routes, satellite connectivity, or niche regional networks.

• Shift toward edge computing and enterprise services – If bandwidth margins shrink, focus on value-added services (SD-WAN, private 5G, managed security, hybrid cloud solutions).

• Form strategic alliances – Partner with hyperscalers (instead of competing) to co-build infrastructure or leverage interconnect agreements.

• Regulatory lobbying – Push for fair access rules or enforce open interconnection mandates to avoid getting locked out.

The Big Picture

This isn’t just about one cable—it’s the start of a broader Big Tech takeover of global connectivity. If telcos don’t adapt, they risk becoming secondary players in the very industry they built. The companies that move fastest—whether by collaborating, competing, or innovating around Meta’s infrastructure—will define the next era of telecom.

Who do you think will react first—hyperscalers, telcos, or regulators?