The financial performance of Seacom indicates the high level of risk that large infrastructure projects involve. Over time, it is likely that terrestrial connectivity prices will decrease, and the demand for Seacom’s service is likely to increase. But its future earnings potential remains uncertain. Case study: Facebook Asia–Pacific Gateway This case study demonstrates an example of an established corporate organization investing in a relatively new market in the expectation of generating downstream revenues. The Asia–Pacific Gateway (APG) is a 10 000 km undersea cable project designed to improve Internet speeds for citizens and businesses in Asia. The fibre-optic cable will run directly from Malaysia to Korea (Rep. of) and Japan, with links branching off to other countries. It is designed to provide higher transmission speeds and reduce the current dependence on Singapore as the main regional gateway for Internet traffic. APG also is expected to minimize the number of Internet traffic hops, reducing latency and improving the user experience. Meanwhile, APG also will provide redundancy for existing cables, which have suffered from several breaks. In April 2015, for example, Internet users in Vietnam faced connectivity issues on the Asia-America Gateway cable that were expected to last three weeks90.Facebook saw these infrastructure problems as a hindrance to its users. With Southeast Asia becoming one of its fastest-growing markets, Facebook wanted to shore up the underlying infrastructure in the region. Facebook’s motivation, therefore, was similar to that of Google and other software companies in wanting to support infrastructure in its high-growth markets. Facebook saw the APG as a chance to improve its users’ experience in India, Indonesia, Malaysia, the Philippines, Hong Kong China and Singapore91. So in 2012, Facebook joined a consortium of investors supporting the APG roll-out, a move that boosted prospects for the project, which had been struggling with funding issues for three years. In addition to Facebook, the consortium included China Mobile, China Telecom, China Unicom, Chunghwa Telecom, KT Corp, LG Uplus, NTT Communications, StarHub, Trends in Telecommunication Reform 2016 27 Chapter 1 Box 1.11: Key lessons: Seacom, Africa • The role for regulators in this case was limited. There would need to be a case for regulatory intervention, which is currently unclear, particularly as the cable has brought about significant economic benefits and is available on an open access basis. In addition, coordinating regulatory efforts across a range of countries can be complex to implement. Regulators would need to undertake a comprehensive regulatory analysis and consider whether there is a case for intervention.• Funding was not made in isolation but rather in collaboration with some high-profile global investors, which reduced the risk. In this instance, however, there was no investment by operators that could benefit from the infrastructure directly. This may be a contributing factor to the early losses.• Investors should be fully aware of the demand characteristics behind their investments. Investment in large infrastructure projects carries high risk due to the high amounts required. For example, the infrastructure may be made available too soon, and there may not be enough demand to make the project commercially feasible in the short term. A reason for Seacom’s poor financial performance is that the demand for data is not high enough.• High prices for terrestrial broadband, lack of broadband penetration and low usage of high bandwidth services and applications are some reasons why the demand for data is not high enough. Regulators and governments can take actions to improve broadband take-up and the availability of broadband services to improve the market attractiveness for investors.