Info-tech

RCom estimates Eagle sub-sea cable system will need $600-m investment

Rajesh Kurup Mumbai | Updated on January 16, 2018 Published on January 16, 2018

Bill Barney, Chief Executive Officer, Reliance Communications Ltd and Chairman & CEO, Global Cloud Xchange, addressing a press conference in Mumbai on Tuesday

22,000-km cable will extend up to Italy in the West and Hong Kong in the East

Reliance Communications estimates its new submarine cable, which is being financed by project partners and expected to be lit up by the third quarter of 2020, to cost an estimated $600 million. On completion, the new sub-sea cable system – Eagle – would connect Asia and Europe over a 22,000 route km and would have a revenue potential of $1 billion per year.

The new submarine cable system is being built by RCom’s wholly-owned subsidiary Global Cloud Xchange (GCX). On commissioning, this will be the company’s sixth submarine cable system. GCX already owns five sub-sea cables – FEA, FA-1, FNAL, FALCON and HAWK – with a total of 68,698 route km.

GCX had first announced the construction of the cable in November 2017. Following the completion of this cable, GCX’s will own a total of 90,000 route km of cable making it the single largest cable operator.

“We would need about $600 million to build the cable, which we expect to come in from our project partners. We are in discussions to rope in as much as 30 partners, while we anticipate to get about $700-800 million in pre-sales itself,” Bill Barney, CEO at RCom said.

The company has got commitments of about $300 million, while it has already roped in Jack Ma-led Alibaba as a project partner. GCX is in talks with other over-the-top service providers for similar deals.

The Eagle submarine cable system, which will have its hub in Mumbai, will connect to Italy in the west and Hong Kong in the east. The European leg of the sub-sea cable would be completed first, while the network will be completely self-financed, with no upfront financing or investment requirements from RCom. Starting with a 100 GB capacity and upgradable to 400 GB, Eagle comes with a four and six fibre, with an initial design capacity of 12-24 TBPS per pair.

A strategic edge

“Nearly half of the world’s population is reachable with a short distance from India’s borders, giving the country a strategic edge in the new digital era. This initiative levels the playing field for India’s companies to compete globally,” Barney, who is also the Chairman and CEO at GCX, added.

In addition, GCX has also entered into partnerships to expand its cloud ecosystem and data centre footprint.

RCom shares ended lower 0.79 per cent at ₹31.25 on a weak BSE, which closed down 0.21 per cent on Tuesday.

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Published on January 16, 2018
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