Africa, Middle East see boost in submarine capacity

It's full speed ahead for several submarine cable system projects linking Africa, the Middle East, and Europe. And it's just not the usual big name carriers that are getting involved in the undersea fiber-optic able projects.

by Kurt Ruderman

Overview
Despite the downturn, it's full speed ahead for several submarine projects linking Africa, the Middle East, and Europe. And it's just not the usual big name carriers that are getting involved.

A wave of major submarine cable systems linking Asia, Africa, and Europe will enter service in 2009 and 2010, reflecting the new strategies of incumbents and the expansion of alternative carriers in the three regions.

The systems will provide needed new capacity for countries in the three continents and undersea fiber capacity for the first time to the east coast of Africa and the Indian Ocean island of Madagascar. The Asia-Africa-Europe systems represent a shift in the undersea capacity market, which has been dominated until recently by transpacific and transatlantic submarine cable networks.

While the global financial crisis has raised concerns among the builders of these systems--especially regarding future financing--none have dropped their submarine cable plans. Submarine cable systems are long-term projects, and these new systems began development before the current financial crisis hit. In the case of major players such as France Telecom (www.francetelecom.com, the submarine cable systems are vital to their international business plans.

Over the past few years, France Telecom has been refocusing its foreign strategy on Africa, the Middle East, and Asia--regions where France historically has had strong political and commercial ties. Today, the French incumbent owns some 15 mobile and fixed companies in Africa and four more in the Middle East and Asia. France Telecom is part of the consortium behind the 20,000-km SEA-ME-WE-4 cable that goes from Singapore to Marseilles, France, linking 14 countries on the route. The system, which has been supplied by Alcatel Lucent (www.alcatel-lucent.com), is being upgraded and expanded.

France Telecom is also part of another consortium project, India-Middle East-Western Europe (IMEWE), a 13,000-km submarine cable network, which will link Mumbai (India) to Marseilles when completed late this year. The system comprises three segments: a submarine cable in the Mediterranean, a terrestrial cable running across Egypt from the Mediterranean coast to the Suez Canal, and a submarine cable linking Suez to Mumbai. Alcatel-Lucent is the contractor for the whole system. The consortium includes France Telecom, Saudi Telecom, Etisalat (United Arab Emirates), Bharti Airtel (India), Ogero (Lebanon), PTCL (Pakistan), Telecom Egypt, Telecom Italia Sparkle, and VSNL (India).

“We need to provide capacity to these new markets,” says Didier Duriez, head of international backbone and network factory, France Telecom. “We put in capacity in the Atlantic, then in Asia. The big development now is in Africa. We are now upgrading SAT3 and installing LION, which will be the first submarine cable to Madagascar [where France Telecom operates under the brand name Orange Madagascar]. It will be ready for service in June 2009.”

The 1,800-km LION cable will link Madagascar to the rest of the world via an interconnection with the SAT3-WASC-SAFE cable, which lands in the Indian Ocean islands of Reunion and Mauritius. The SAT3-WASC-SAFE cable links Asia via South Africa to Europe.

Internet is the big driver for the submarine and terrestrial fiber systems. “Whenever France Telecom enters a new market, one of its main goals is to provide broadband services,” Duriez says. “We are now in 15 African countries, so we need a lot of capacity. Satellite cannot provide the capacity needed for broadband. This is why we are also building terrestrial fiber networks to reach our companies in landlocked countries such as Mali and Uganda.”

France Telecom and other operators in western Africa expect Africa-Europe traffic to grow and have formed a consortium, which is planning a new system called Africa Connecting Europe (ACE).

“We have just signed an MOU [memorandum of understanding],” Duriez says. “We would like to have ACE in place for 2011. It will connect the west coast of Africa to Europe. Africa's west coast will be saturated in three years without it. The consortium currently has about 14 members. As of now, the planned ACE goes from Gabon to France. But it could be extended to South Africa.”

The east coast of Africa, much of which is still not connected to submarine cable, will soon be connected to international submarine networks via two Alcatel-Lucent-supplied consortium projects, the East Africa Marine System (TEAMS) and EASSy. The 4,900-km TEAMS is under construction and will connect the port city of Mombasa in Kenya with the port of Fujairah in the United Arab Emirates. EASSy, a 10,000-km network, will go from Sudan to South Africa, linking via branching units in Djibouti, Somalia, Kenya, Tanzania, Madagascar, and Mozambique.

While former incumbents continue to build consortium cable, many of the new major alternative carriers such as Orascom Telecom (www.orascomtelecom.com) of Egypt are building their own cables.

“We do not want to be dependent on consortium cables,” explains Nagy Anis, the managing director of Middle East North Africa (MENA), Orascom Telecom's newest submarine cable system, which will link Sicily to Oman via Egypt. “We need bandwidth and connectivity for Orascom's operations,” Anis says. “We also plan to sell capacity.”

Alcatel-Lucent is supplying the Mediterranean section of MENA, which will go from Alexandria, Egypt to Catania, Sicily, a distance of 2,000 km, later this year. Tyco Telecommunications (www.tycotelecom.com) is supplying a second section that will go from Suez to Al Seeb in Oman, where another Orascom cable, TW1, connects to the company's Middle East operations in Pakistan.

Orascom has been expanding in Asia across North Africa and into Europe. The company operates GSM networks in Algeria (OTA), Pakistan (Mobilink), Egypt (Mobinil), Tunisia (Tunisiana), Bangladesh (Banglalink), Zimbabwe (Telecel Zimbabwe), and North Korea. Orascom Telecom also owns 19.3% of Hutchison Telecommunications. Orascom's submarine cable also provides backhaul for the company's LINKdotNET ISP operations in the United Arab Emirates, Saudi Arabia, Qatar, Algeria, and Pakistan.

In Europe, Orascom CEO and Chairman Naguib Sawiris owns, through personal investments, Wind, a major alternative Italian telecom company, and Helas, a major Greek carrier. Wind is MENA's landing partner in Italy. There is a planned branch for MENA in Greece.

MENA will be Orascom's second submarine cable in the Mediterranean. Orascom has a cable called Med, which goes from Algiers to Marseilles to support its fixed and mobile international operations in Algeria.

The new Asia-Europe submarine systems are turning Egypt into an important international telecom hub. Nearly all the systems use terrestrial networks in Egypt to go from the Red Sea to the Mediterranean because of limited space in the Suez Canal.

Responding to its own needs and the increase in international traffic, Telecom Egypt (www.telecomegypt.com.eg/English/index.asp) has launched its own system to link Egypt to Europe--Telecom Egypt North (TEN). The 3,100-km system, supplied by Alcatel-Lucent, will go from Alexandria to Marseilles. It will go into operation in the second half of 2009.

The surge in submarine cable activity has benefited Alcatel-Lucent and Tyco Telecommunications, which are supplying most of the systems. Approximately 50% of Alcatel-Lucent's submarine cable activity last year was between India and Europe, says Georges Krebs, chief operating officer of Alcatel Lucent Submarine Networks.

“India and the Middle East are important growth markets. There has been an increase in competition in the region.” Krebs says. “Operators are investing in multiple systems.”

Saudi Telecom and Bharti, who are members of IMEWE, are also members of the Europe India Gateway (EIG) system. EIG, which is being built by Alcatel-Lucent and Tyco, will have a submarine cable going from the UK to Alexandria, with landing points in Gibraltar, Morocco, Libya, and Monaco; a terrestrial network in Egypt; and a second submarine cable going from Egypt to India with landing points in Saudi Arabia, Djibouti, Oman, and the United Arab Emirates. The system is expected to be ready for service in 2010. The other consortium members are Verizon, BT, C&W, Libyan Telecom, and Dubai Holdings.

Krebs says that the situation of multiple systems is normal in today's market. “Redundancy is important,” he explains. “Operators do not want to be dependent on carriers' carrier systems. It's normal to see competition between systems. Investors do not wait for others to build.”

The wave of submarine cable construction has been particularly strong due to a surge in Internet and mobile traffic. “In India the submarine cables are in response to increased competition and to very strong traffic growth because the country started from a low level,” Krebs says. “A lot of operators there are worried about not having enough capacity.”

For more information:

Lightwave Online: EASSy More than Doubles Its Network Design Capacity

Lightwave Europe: Libyan Fibre Deployments Aid Modernisation

Lightwave Online: Omantel Signs Agreement to Extend Submarine Cable to Omani Coasts

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