TyCom looks to shake up worldwide submarine-network market

By ROBERT PEASE

NETWORKS

With the withdrawal of a major contender from the race for preeminence in the new generation of undersea global carriers, the outcome appears certain. Or does it?

Early last year, two global network companies were dominant in the minds of the industry as forces destined to change the face of global communications. Global Crossing Ltd. and Project Oxygen Ltd. (both of Hamilton, Bermuda) publicized ambitious plans to interconnect the world with the latest fiber-optic technology. The ultimate showdown would take place in terms of bandwidth provisioning and pricing (see Fiber Exchange, a supplement to the June 1999 Lightwave, page 2).

But while Global Crossing continues announcing more build-outs of its planned global network, Project Oxygen's ambitious 275,000-km system (later reduced to 168,000-km) never got off the drawing board. Although there are several other global network builders trying to get a leg up on Global Crossing by addressing new technologies-such as Teleglobe's announcement to deploy premium public Internet Protocol (IP) on a worldwide scale (see Lightwave, July 1999, page 1)-most analysts agree Global Crossing has a substantial lead in system deployment.

However, a new-yet not so new-competitor has emerged that may be capable of wresting away some of Global Crossing's dominance in worldwide connectivity. TyCom Ltd. was formed in March 2000 as a wholly owned indirect subsidiary of Tyco International Ltd. to serve as the holding company for its undersea fiber-optic cable communications business. The company was formerly known as Tyco Submarine Systems Ltd. (Morristown, NJ), a combination of the former AT&T submarine systems business (acquired by Tyco in 1997), Simplex Technologies Inc. (acquired by Tyco in 1974), and Telecomunicaciones Marinas S.A. (Temasa-acquired in 1999).

Officially launched with an initial public offering last July, TyCom is hardly a newcomer to the submarine-cable industry. It comprises a research and development operation, three separate manufacturing facilities for wet and dry plant electronics, and undersea cable and fleet operations centers in the United States and Spain. The company also has installed more than 85 undersea systems worldwide.

The decision to commit a significant portion of TyCom's undersea fiber-optics business to implement the TyCom Global Network (TGN) was based on the demand for undersea fiber-optic networks to serve the growing worldwide communications needs, driven by the growth of worldwide Internet demand. Pioneer Consulting (Cambridge, MA) forecast a compound annual growth rate of more than 100% for transoceanic demand from 1999 to 2004.

With that in mind, TyCom announced its intention to build "the largest and most advanced global undersea telecommunications fiber-optic network" last January. The first phase of TGN will span 70,000 undersea km and connect more than 30 major cities around the globe. The company is using its own design technologies and manufacturing all the cable, optical amplifiers, and terminal equipment necessary to complete the initial phase. The network will operate at up to 7.68 Tbits/sec, depending on segment and fiber count. The fiber counts vary from four to eight pairs.

TGN is scheduled for first-phase operations on TyCom Transatlantic and northern Europe by mid-2001. Undersea surveys and landing licenses for the United States and Europe have been completed. Ground has been broken for the U.S. network-management center, and cable stations are under construction in several countries. TyCom transpacific and Western Europe will be in service around mid-2002, with TyCom Mediterranean, Baltic, and northern Asia coming online in mid-to-late 2002. Subsequent phases will roll out over a multiyear period, extending the network to more than 250,000 undersea km over approximately 10 years.

All undersea segments of the network will be new submarine cables deployed by TyCom's own fleet, currently 11 ships, with two more ships under construction and options for an additional four vessels.

"We continually assess our vessel needs in terms of network contracts, SeaHorse maintenance obligations, and TGN activities," says Frank Cuccio, managing director of network construction and maintenance for TyCom. "To supplement the fleet, we also engage spot charters and long-term charters. Our ongoing shipbuilding program will further expand our marine assets. These activities will ensure that we continue to meet all customer and TGN requirements."

The only capacity being acquired for TGN thus far will come from part of the TyCom-engineered and -installed C2C system, owned by C2C Pte. Ltd., a private cable development company led by Singapore Telcommunications. The C2C system, announced last July, is a 17,000-km high-capacity system connecting eight Asian countries.

"TyCom is a 15% equity stakeholder in C2C and will acquire capacity on the C2C system to extend the reach of TGN in Asia," says Brian Roussell, Tycom's vice president of global sales and marketing. "At the same time, C2C Pte. Ltd. will also purchase capacity on TGN's transpacific ring."

Backhaul capacity for TGN is being acquired through a combination of leasing dark fiber or by building new terrestrial connections. Terrestrial dark fiber was acquired from Viatel Inc. (New York City) to extend the network to major telecom centers in Europe. "In this way, we will manage and be fully responsible for all back-haul facilities and services that we provide to customers," says Roussell.

TyCom plans to offer TGN capacity from STM-n increments up to entire fiber pairs, sold to first- and second-tier carriers. As part of the product mix, collocation services will also be available as well as customer care and maintenance programs.

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