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Cable Compendium: a guide to the week’s submarine and terrestrial developments

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2 Dec 2016

Filipino telecoms giant PLDT has set aside PHP6.7 billion (USD135 million) for the deployment of a new undersea cable linking the Philippines with the US via Japan to meet growing demand for international bandwidth, the Inquirer writes. PLDT chair and CEO Manuel Pangilinan said that new infrastructure would provide an additional 12TB of data, when completed in three years’ time. Further, Mr Pangilinan noted that his company has already approved the investment, which corresponds to PLDT’s share in an international consortium deploying the cable infrastructure.

Submarine cable operator SEACOM has announced a KES15 billion (USD144.6 million) partnership with Indian Ocean Exchange Limited (IOX), a subsidiary of INDOI, for the deployment of a new submarine cable between Kenya and Mauritius. The IOX Cable will connect Rodrigues (Mauritius) to ‘the rest of the world’, with potential branches to Reunion and Madagascar. Mombasa in Kenya is the preferred connection point for the cable, given the large number of existing submarine cable links. ‘The cable will enable African and Indian business communities to connect seamlessly across a fast and reliable digital infrastructure, ranging from undersea cable to data centres and cloud platforms’, the press release said. The IOX Cable is expected to be ready for commercial service by the first quarter of 2019.

Rodrigo Ramirez, the head of Chile’s Department of Telecommunications (Subsecretaria de Telecomunicaciones, Subtel), has revealed that the authority is planning to relaunch a dormant fibre-optic project shelved in October 2016, under which the government aims to deploy 3,000km of fibre-optic infrastructure in the southern Patagonia region. The project fell flat after Conexiones y Telefonia Austral was named as the sole company to have submitted a bid for one of the four sections of the Fibra Optica Austral project. Ramirez said that the telecoms watchdog will launch a public consultation in early December, with plans to commence the programme in 2H17. Ramirez said that there could be modifications regarding the formation of consortiums, the definition of preferential use of the infrastructure by the state, and the time allowed to make repairs to damaged cables in case of cuts. The official was cited as saying: ‘We are going to launch a second tender. We accept self-criticism. Perhaps the tender lacked more detailed discussion.’

The World Bank’s Board of Executive Directors has approved USD5.95 million in funding for the construction of a new broadband cable, which will link the existing Southern Cross Cable Network (SCCN) to Fiji’s second largest island Vanua Levu, which is located 150km north of Suva. The Fiji Connectivity Project includes the design, supply and installation of a 95km submarine fibre-optic cable, the construction of a cable landing station in Savusavu, purchase of internet capacity and technical assistance for the Fiji Commerce Commission. The project is closely linked to the ongoing Samoa Connectivity Project, with the Savusavu cable connecting directly to the planned 1,470km Tui-Samoa cable, which is scheduled to be ready for service (RFS) in Q3 2017. The project is part of the World Bank’s overarching Pacific Regional Connectivity Programme.

A ship dragging its anchor on the seabed in the English Channel has cut the three main submarine cables to the Channel Islands. Cable owners JT Jersey (formerly Jersey Telecom, JT), Sure and BT disclosed that it could take up to three weeks to repair the fibre-optic links. All communications traffic from JT is going through a single link to France, the 425km HUGO network owned by Sure, as it was the only cable not affected by the incident. Daragh McDermott from JT said: ‘With all traffic now using this connection, customers may notice some impact on services … It is exceptionally unlucky and unprecedented for three submarine cables to the UK to be cut in the same day.’

Zayo Group has entered into an agreement to acquire Electric Lightwave, formerly known as Integra Telecom, for USD1.42 billion in cash and debt. Electric Lightwave, which provides infrastructure and telecom services primarily in the Western United States, has 8,100 route miles of long haul fibre and 4,000 miles of dense metro fibre in Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane and Boise, with on-net connectivity to more than 3,100 enterprise buildings and 100 data centres. Zayo anticipates more than USD40 million in annual cost synergies to be realised throughout the integration process and will benefit from more than USD400 million in net operating loss carry-forwards acquired in the transaction. Zayo expects to close the transaction in Q1 2017, subject to customary regulatory approvals and closing conditions.

US-based global cloud networking provider GTT Communications has purchased the customer base of former Ethernet provider Yipes from Reliance Communications (RCOM) for USD28 million. The Indian company revealed that it spun off its Ethernet business division into a newly-established Delaware-registered subsidiary called Onyx NewCo and then sold the new unit just days later. Reliance bought Yipes for USD300 million back in 2007 as part of a wide-ranging expansion drive beyond India, and subsequently renamed the unit Global Cloud Xchange (GCX). As previously reported by TeleGeography’s Cable Compendium, RCOM has been looking to offload the business since 2012 to help cut its debt, with an initial public offering (IPO) falling through in July 2012 and subsequent negotiations with potential buyers amounting to nothing.

Lastly, UK telecoms watchdog Ofcom will begin steps to force the legal separation of BT and its local access infrastructure business unit Openreach, after the British telecoms giant failed to provide a satisfactory alternative that would address concerns that the current relationship hindered competition among broadband services providers.

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