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

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2 Mar 2018

The Samoan government has held a ground-breaking ceremony for the new South Pacific Submarine Cable Depot at Matautu Wharf, the Samoa Observer writes. The facility is a joint venture between US-based TE SubCom and the Samoa Submarine Cable Company (SSCC), with the two companies signing a contract for the USD2 million warehouse in February 2018. A submarine maintenance vessel will also be based at the facility to maintain and service submarine cables in the Pacific region. Samoan PM Tuilaepa Sa’ilele Malielegaoi commented at the ceremony: ‘Two weeks ago we experienced a very significant milestone, when we launched Samoa’s very own submarine cable, the Tui-Samoa. At the time I spoke explicitly about Samoa’s aspirations to play a more proactive role to interconnect through IT with all the Polynesian nations within the Polynesian Leaders Group in the Pacific, especially connections through other regional submarine cables in the pipeline, most notably the Manatua cable linking Tahiti, Cook Islands, Niue and possibly Tonga to Samoa. And Samoa should take the initiative, which means unavoidably the hub should be Samoa.’ The 8Tbps Tui-Samoa network, which entered services last month, connects Samoa to Wallis and Futuna, Vanua Levu (the second largest island of Fiji) and on to Suva on the Fiji mainland.

Chile’s Ministry of Transport and Telecommunications (Miniseterio de Transportes y Telecomunicaciones, MTT) has announced that construction work on the USD100 million ‘Fibra Optica Austral’ project (shelved in October 2016 but re-launched in May 2017), under which the government aims to deploy nearly 4,000km of fibre-optic infrastructure in the southern Patagonia region, has begun. Local news source Diario Financiero cited telecoms minister Paola Tapia Salas as saying that work is expected to be completed within 26 months. As reported by TeleGeography’s Cable Compendium in August 2017, four companies submitted bids for the submarine section of the contract, namely Telefonica, which bid CLP53.5 billion (USD82.4 million); Chilean rural telecoms services provider CTR with CLP52.7 billion; Austral Telco – an investment consortium led by Chilean mobile operator WOM – CLP52.7 billion; and Canada’s VuPoint Systems Ltd (undisclosed financial offer). Three companies – Silica Networks, VuPoint Systems and Conectividad Austral – submitted bids for the terrestrial section of the project. In October the ministry revealed that CTR, in association with Huawei Marine, won the tender for the submarine section and one of three land-based sections of the project. The consortium will deploy a 3,000km submarine cable from Puerto Montt to Puerto Williams with landings at Caleta Tortel and Punta Arenas, in addition to a terrestrial link from Puerto Natales to Porvenir in Magallanes. Two of the land-based sections in Los Lagos and Aysen were not awarded, as the submitted bids failed to meet technical criteria. The government is now planning to relaunch the corresponding tenders.

The Asia-Pacific Gateway (APG)* submarine cable connecting nine Asian nations – Vietnam, Japan, Hong Kong, China, Singapore, Malaysia, Taiwan, South Korea and Thailand – has experienced a fault on 27 February, a representative of telecom group Viettel told Viet Nam News. The location of the disruption is reported to be 125km from Hong Kong, affecting traffic from Vietnam to Hong Kong; the portion of the APG that stretches from Vietnam to Singapore, however, is still operating normally, according to Viettel. The 10,400km system – which was certified ready for service (RFS) in November 2016 – suffered problems shortly after its launch, in late December, resulting in its shutdown in mid-January 2017. The cable was again damaged in June, November and December 2017. The APG cable was moved to a new location on 7 January 2018, due to the Singapore government project to expand Changi Airport.

GTT Communications has entered into a definitive purchase agreement to acquire Europe’s largest independent fibre networks operator Interoute for approximately EUR1.9 billion (USD2.3 billion) in cash. The acquisition will expand GTT’s Tier 1 global IP network with over 400 PoPs, spanning 24 metro areas and interconnecting 126 cities across 29 countries. Further, it will add 15 data centres, 17 virtual data centres and 51 colocation facilities to GTT’s footprint. Rick Calder, GTT president and CEO, said: ‘This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfil our clients’ growing demand for distributed cloud networking in Europe, the US and across the globe. Following our successful, proven acquisition model, we expect to complete this integration within three to four quarters post-close and achieve a post-synergy multiple of seven to eight times adjusted EBITDA or better on a pro-forma basis.’

Zayo Group Holdings has completed the takeover of Spread Networks, a privately-held fibre network company that operates a direct, low latency fibre route between Chicago and New York, for USD127 million. The acquisition immediately enables Zayo to combine Spread Networks routes with Zayo routes for coast-to-coast, low-latency dark fibre and lit fibre-based solutions. As a result, Zayo can now provide a fully owned, low-latency wavelength route from Seattle to New York. Dan Caruso, Zayo’s chairman and CEO, said: ‘We acquired Spread Networks because of their leadership in ultra low-latency network solutions for the financial and trading sectors. Spread Networks by Zayo will build on this flagship network, providing customers with additional fibre and microwave options for fast, high-bandwidth connectivity.’

Elsewhere, Zayo has entered into an agreement to sell Minnesota-based local exchange carrier Scott-Rice Telephone to New Ulm Telecom for USD42 million. Zayo acquired Scott-Rice Telephone as part of its March 2017 purchase of Electric Lightwave. Since the acquisition, it has been managed separately but within Zayo’s Allstream business segment. Zayo CFO Matt Steinfort said: ‘This transaction represents further progress toward the separation of our Allstream business. It is consistent with Zayo’s strategic focus on communications infrastructure, and our goal of maximising the value of our non-core assets.’ The closing of the transaction is subject to regulatory approvals and customary closing conditions, and is expected to occur in Q2 2018.

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