Daniel Kurgan took up the mantle as CEO of Arelion in October 2023 and in doing so inherited  a company at the heart of a major market shift. Hyperscale cloud platforms, AI workloads and sustainable data-centre development are redrawing Europe’s digital infrastructure map, placing the Nordics and Baltics in the spotlight.

A year on, Kurgan says Arelion’s strategy is simple: invest selectively where scale, sustainability and connectivity intersect, while keeping a tight grip on capital efficiency.

“The momentum is right,” he tells Capacity Global. “We see a lot of traction coming from hyperscalers and the whole AI movement. The Nordics have become a key region for data centre deployment because of available land, affordable renewable energy and rising connectivity needs. We believe we have all the building blocks to be there at the right time.”

Fibre for the hyperscale era

Arelion (formerly Telia Carrier) is making some of its most significant fibre investments yet across Sweden, Finland and neighbouring markets. The build-out targets the surge in hyperscale data centres driven by artificial intelligence, machine learning and cloud services that depend on low-latency, high-capacity routes.

“25 years ago, when Telia built this network, they had the vision to deploy and own their own ducts,” Kurgan explains. “That gives us a massive advantage today. We’re now over-pulling new fibre to meet the requirements of hyperscalers that are asking for tens of fibre pairs – something unheard of just a few years ago.”

Its current programmes focus on high-density fibre routes linking data-centre clusters with continental Europe, reducing latency and boosting resilience.

“We’re convinced we’re in the perfect position to offer a very competitive and diverse alternative to other big providers,” says Kurgan. “The demand is increasing from many players, and the needs are growing every quarter.”

Balancing growth and capital discipline

Even in a market hungry for bandwidth, network expansion requires nerve. Kurgan acknowledges that for operators of Arelion’s size, CapEx risk remains the defining challenge.

“We have to place our bets and make those commitments ahead of customer contracts,” he says. “That’s the challenge – knowing where to put your growth CapEx.”

Arelion’s answer is a philosophy of “selective geo-expansion.” Rather than competing head-to-head in the crowded FLAP metros (Frankfurt, London, Amsterdam and Paris) the company is concentrating investment where it can offer clear differentiation and strategic value.

“Our strength lies in the Nordics, the Baltics and Eastern Europe,” Kurgan explains. “Those areas are underserved and strategically important. We’re being selective – where we can make a real impact.”

That selectivity reflects a wider industry truth: even hyperscale connectivity providers cannot predict precisely where demand will peak.

“Nobody really knows what we’re building for,” Kurgan says. “We don’t know exactly where demand will be in 3 or 5 years’ time. But we have enough indicators that these investments will pay back.”

Bridging the Baltic gap

Arelion’s European expansion currently centres on a new low-latency route across the Baltic Sea, linking Sweden, Finland and the three Baltic States (Estonia, Latvia and Lithuania) with Poland and onward into the company’s pan-European network.

The project, partly funded by the European Union, will enhance redundancy and diversity for a region long considered connectivity-poor compared with Western Europe.

“The Baltic region is still a little underserved,” Kurgan notes. “From a geopolitical standpoint, it’s also very important. We’re building an alternative, diverse route that creates a state-of-the-art corridor where connectivity is still catching up.”

The EU support underscores the growing perception of fibre infrastructure as critical national infrastructure, vital to regional resilience and digital sovereignty.

“Our European expansion is focused on the Nordics, the Baltics and the eastern part of Europe,” says Kurgan. “It’s about being selective, investing where we can make a difference.”

Network security for the AI age

As AI workloads proliferate and cyberattacks become more sophisticated, network security is increasingly integral to connectivity strategy. Arelion’s answer is SecureConnect, a DDoS-mitigation service embedded across its IP transit and wavelength portfolio.

“It’s almost like an entry-level, built-in version of our full DDoS protection product,” Kurgan says. “It gives customers (especially enterprises) a first layer of security without needing a standalone solution.”

Because Arelion operates one of the largest global IP backbones, its vantage point across hundreds of terabits of daily traffic allows it to detect and neutralise malicious flows early. Smaller attacks can be contained automatically, while larger threats are escalated to full mitigation.

“Seeing so much traffic across our network means we’re very well placed to understand and respond to the DDoS landscape in real time,” Kurgan adds.

IP transit: the quiet backbone of the Internet

Despite forecasts of its decline, IP transit remains a critical enabler of the global Internet. While caching and private peering have shifted traffic patterns, Arelion continues to see steady growth in IP transit volumes, particularly in Europe and fast-growing adjacent regions.

“Even with caching, IP transit is still a big part of global traffic,” Kurgan notes. “We still see volumes growing – especially in Europe and neighbouring regions where data consumption is increasing rapidly.”

He concedes that IP transit economics hinge on scale versus price erosion: margins tighten, but efficiency and size preserve profitability.

“There’s always a trade-off between volume growth and price erosion,” he says. “But we’re not bearish. It’s a good business for us – one that only works if you have scale.”

“If you’re not big enough, it just doesn’t work,” Kurgan says. “Credit to my Swedish colleagues who built this network: from a small country, we’ve created the world’s most connected IP backbone.”

“We’re not chasing every market,” Kurgan concludes. “We’re focusing on the ones where we can lead, where we can add value, and where the long-term fundamentals are right.”

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