20071128 Submarine Networks Africa Johannesburg Presentation

7/29/2019 20071128 Submarine Networks Africa Johannesburg Presentation

1/42

Th e W o r ld w id e Su b m a r in e Ca b le M a r k e tTh e W o r ld w id e Su b m a r in e Ca b le M a r k e t

a n d th ea n d th e

St a t e o f Afr ica n Su b m a r in eSt a t e o f Afr ica n Su b m a r in e

C o m m u n i c a t i o n sC o m m u n i c a t i o n s

P r e s en t ed b y:P r e s en t ed b y:

M ich a e l R u d d yM ich a e l R u d d y

M a n a g in g Dir e ct o rM a n a g in g Dir e ct o r

Te r a b it Co n su lt in gTe r a b it Co n su lt in g


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Over view o f th eOver view o f th e

W o r ld w id e Su b m a r in e Ca b le M a r k e tW o r ld w id e Su b m a r in e Ca b le M a r k e t


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H is to r ica l Un d e r s e a In ve s tm e n t ,H is to r ica l Un d e r s e a In ve s tm e n t ,

19871987--2 0 0 7: M ile s t o n e s2 0 0 7: M ile s t o n e s($Bi lli ons by rea dy($Bi lli ons by rea dy --fo rfo r --s e r v ic e d a t e ; i n c lu d e s s ys t e m s u n d e r c o n s t r u c t io n in 2 0 0 7)s e r v ic e d a t e ; i n c lu d e s s ys t e m s u n d e r c o n s t r u c t io n in 2 0 0 7)

$0

$2

$4

$6

$8

$10

$12

$14

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1988 = 1stTransoceanic

Fiber Optic

Cable

Early- and

Mid-1990s:

ConsortiumEra

1997:

FLAG

1998: AC-1

SPE

CULATION

BANKRU

PTCY,

REORGAN

IZATIO

N


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I n ve s tm e n t b y R e gio n , 2 0 0 0In ve s tm e n t b y R e gio n , 2 0 0 0 --2 0 0 82 0 0 8($Bi l l ions)($Bi l l ions)

Transatlantic, $6.0,

23%

Transpacific, $5.7,

21%

East Asian Regional,

$5.0, 18%

South America,

$4.0, 14%

European Regional,

$1.5, 5%

Australia, $1.8, 6%

Europe-Asia, $0.9,

3%

Caribbean, $0.8, 3%

Other, $1.8, 7%

Historical investment = four regions: Atlantic, Pacific,East Asia, and South America


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I n ve s tm e n t b y R e gio n , 2 0 0 6In ve s tm e n t b y R e gio n , 2 0 0 6 --2 0 0 82 0 0 8($Bi l l ions)($Bi l l ions)

Transpacific, $1.6,48%

Europe-Asia, $0.4,

12%

Australia, $0.4, 11%

Caribbean, $0.2, 7%

East Asian

Regional, $0.2, 6%

Other, $0.1, 5%

South Asia, $0.1, 4%

Sub-Saharan

Africa, $0.1, 2%

Transatlantic, $0.0,

0%

South America,

$0.0, 0%European Regional,

$0.1, 5%

Current construction boom concentrated in the Pacific and South Asia


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Tr e n d s in Ge o gr a p h ic De p lo ym e n tTr e n d s in Ge o gr a p h ic De p lo ym e n t

Trend has been away from Europe and towardTrend has been away from Europe and toward

Asia (south Asia and east Asia)Asia (south Asia and east Asia) Two new transpacific systems (TPE and AAG)Two new transpacific systems (TPE and AAG)

will enter service in 2008/2009will enter service in 2008/2009

Other proposed transpacific systems includeOther proposed transpacific systems includeGoogles Unity, EACGoogles Unity, EAC--2, and FLAG NGN2, and FLAG NGN--44

TranspacificTranspacific

Africa: new hotbed for planned and proposedAfrica: new hotbed for planned and proposed

investmentinvestment


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Fin a n cin g a n d Ow n e r s h ipFin a n cin g a n d Ow n e r s h ip

of Ca b le Sys te m sof Ca b le Sys te m s


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F in a n cin g b y Typ e , 2 0 0 0F in a n cin g b y Typ e , 2 0 0 0 --2 0 0 72 0 0 7( 2 0 0 7 i n c lu d e s sys t e m s u n d e r c o n s t r u c t io n )( 2 0 0 7 i n c lu d e s sys t e m s u n d e r c o n s t r u c t io n )

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007

Other

Open consortium

Entrepreneurial

ClosedConsortium/Carrier-

Owned

Trend: away from entrepreneurial systems and toward carrier-owned systems


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Tr e n d s in Su b m a r in e Ca b le Fin a n cin gTr e n d s in Su b m a r in e Ca b le Fin a n cin g

There are few viable new entrepreneurialThere are few viable new entrepreneurial

systems in the pipelinesystems in the pipeline Almost all new cable systems are being built byAlmost all new cable systems are being built by

carriers, either by themselves or in small groupscarriers, either by themselves or in small groups

Traditional consortium cables are still gettingTraditional consortium cables are still gettingbuilt (mainly highbuilt (mainly high--value systems)value systems)


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Su b m a r in e Sys t e m Ow n e r sSu b m a r in e Sys te m Ow n e r s

Glob a l Ne two r ksGlob a l Ne two r ks

FLAG / Re lia n ceFLAG / Re lia n ce Reliance Group purchased FLAG for $207 million in 2004Reliance Group purchased FLAG for $207 million in 2004

Planning $1.5 billion, 36Planning $1.5 billion, 36--monthmonthbuildoutbuildout financed by LSE IPOfinanced by LSE IPO

VSNLVSNL Tata Group purchased Tyco Global Network for $130 million inTata Group purchased Tyco Global Network for $130 million in

20042004

Also purchased Teleglobe in 2006 for $239 millionAlso purchased Teleglobe in 2006 for $239 million

Upgrading VSNL Transpacific to 1Upgrading VSNL Transpacific to 1 TbpsTbps, considering I, considering I--MEME--WEWEand Asian regional networkand Asian regional network

Glob a l Cr oss in gGlob a l Cr oss in g Singapore TechnologiesSingapore Technologies TelemediaTelemedia acquired approx. 60% foracquired approx. 60% for

$450 million in 2003$450 million in 2003

Other shareholders now include Carlos Slim, Fidelity, DupontOther shareholders now include Carlos Slim, Fidelity, Dupont


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Su b m a r in e Sys te m s Ow n e r sSu b m a r in e Sys te m s Ow n e r s

R e gio n a l N e t w o r k sR e gio n a l N e t w o r k s

As ia Ne tcom / Con n e ct H o ld in gsAs ia Ne tcom / Con n e ct H o ld in gs

AshmoreAshmore Investment Management, Spinnaker Capital, andInvestment Management, Spinnaker Capital, and

Clearwater Capital Partners paid $233 million for EAC in midClearwater Capital Partners paid $233 million for EAC in mid--2006: same team acquired C2C2006: same team acquired C2C

ReachReach

OthersOthers

Telecom I ta liaTe lecom I ta lia (Med Nautilus)(Med Nautilus)

Co lu m b u s Co m m u n ica t io n sCo lu m b u s Co m m u n ica t io n s (Arcos)(Arcos)

Co lu m b ia Ve n t u r e sCo lu m b ia Ve n t u r e s (Hibernia)(Hibernia)

P a cific Cr os s in gP a cific Cr os s in g

Level 3Level 3


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C o n s o r t i aC o n s o r t i a

VerizonVer izon

AcquiredAcquired

WorldcomWorldcom

cable assets (now Verizon Business)cable assets (now Verizon Business)

US landing party for the TransUS landing party for the Trans--Pacific Express System (ChinaPacific Express System (China--

US): major Chinese operators involvedUS): major Chinese operators involved

December, 2006: announced creation of a meshDecember, 2006: announced creation of a mesh--basedbased

transatlantic network across six geographicallytransatlantic network across six geographically--diverse pathsdiverse pathsusingusing CienasCienas CoreDirectorCoreDirector switchswitch

AT&TAT&T

Spearheading AsiaSpearheading Asia--America GatewayAmerica Gateway


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Su p p lie r s o f Ca b le Sys t em sSu p p lie r s o f Ca b le Sys t em s


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Su p p lie r s M a r k e t Sh a r e s , 2 0 0 6Su p p lie r s M a r k e t Sh a r e s , 2 0 0 6 --2 0 0 82 0 0 8($Bill ion s o f p r im ar y con t r ac t s , by RFS da te )($Bill ion s o f p r im ar y con t r ac t s , by RFS da te )

2006 2007 2008 Total Share

Alcatel-Lucent/Pirelli $487 $85 $675 $1,247 39%

Tyco $162 $125 $800 $1,087 34%

NEC $75 $60 $455 $590 18%

Nexans $20 $90 $110 3%

NSW/General

Cable/Siemens/Corning Cable$56 $41 $97 3%

Ericsson $78 $78 2%

KDDI-SCS $0 0%

Fujitsu $0 0%

Other $0 0%


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H ist o r ica l Big 5H is t o r ica l Big 5

AlcatelAlcatel

TycoTyco

NECNEC

Fuj i t suFuj i t su

KDDIKDDI --SCS (*)SCS (*)


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AlcatelAlcatel --L u c e n tL u c e n t

Historically, one of the two leading suppliers ofHistorically, one of the two leading suppliers of

submarine systemssubmarine systems Long legacy dating to STCLong legacy dating to STC

Market share has typically been between 33%Market share has typically been between 33%

and 40%and 40%

Major contracts right now: AAG,Major contracts right now: AAG, EASSyEASSy


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TycoTyco

Historically, one of the two leading suppliers ofHistorically, one of the two leading suppliers ofsubmarine systemssubmarine systems

Legacy dates to AT&TLegacy dates to AT&T--SSISSI Tyco ElectronicsTyco Electronics subsidiary of Tycosubsidiary of Tyco

InternationalInternational

Reported Tyco submarine systems revenue:Reported Tyco submarine systems revenue: 2004: $206 million2004: $206 million

2005: $254 million2005: $254 million

2006: $299 million2006: $299 million

Major contracts right now: TPE,Major contracts right now: TPE, SeacomSeacom

Close relationship with US militaryClose relationship with US military


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NECNEC

Strongest in Pacific, AsiaStrongest in Pacific, Asia

Market share typically 10Market share typically 10--20%20% CoCo--bid with Alcatelbid with Alcatel--Lucent won AAG contractLucent won AAG contract

Also supplying RussiaAlso supplying Russia--JapanJapan


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Fuj i t suFuj i t su

Major coup: Awarded FLAG NGN supplyMajor coup: Awarded FLAG NGN supply

contract ($1.5 billion) in September, 2007contract ($1.5 billion) in September, 2007 Had partnered with Alcatel earlier in decadeHad partnered with Alcatel earlier in decade


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Sm a lle r Su p p lie r sSm a lle r Su p p lie r s

NSW = Acquired by Corning Cable Systems inNSW = Acquired by Corning Cable Systems in

2000 from Siemens; sold to General Cable in2000 from Siemens; sold to General Cable inApril of 2007. NSW had $120 million inApril of 2007. NSW had $120 million in

revenue in 2006.revenue in 2006.

Pirelli = sold submarine division to Alcatel inPirelli = sold submarine division to Alcatel in20042004

NexansNexans

EricssonEricsson

Ot h S liOt h e r Su p p lie r s :


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Ot h e r Su p p lie r s :Ot h e r Su p p lie r s :

H u a w e iH u a w e i / Glo b a l M a r in e/ Glo b a l M a r in e

HuaweiHuawei/Global Marine = In October of 2006/Global Marine = In October of 2006

HuaweiHuawei and Global Marine announced anand Global Marine announced anagreement to coagreement to co--market their products andmarket their products and

services to provide endservices to provide end--toto--end submarine cableend submarine cable

supply capabilitiessupply capabilities Global Marine acquired Red Sky in 2006Global Marine acquired Red Sky in 2006

Ot h M f t I l d iOt h M f t I l d i


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Ot h e r M a n u fa ct u r e r s I n vo lve d inOt h e r M a n u fa ct u r e r s I n vo lve d in

Un d e r s e a Ap p lica t io n s ( P a s t a n d P r e s e n t )Un d e r s e a Ap p lica t io n s ( P a s t a n d P r e s e n t )

AzeaAzea = upgrade market= upgrade market

BookhamBookham = pump lasers= pump lasers

XteraXtera = awarded equipment contract for Shefa= awarded equipment contract for Shefa--2 (2007): Faroe2 (2007): FaroeIslands, Shetland IslandsIslands, Shetland Islands

Hitachi = As of April, 2007, Hitachi forecasted $50 million inHitachi = As of April, 2007, Hitachi forecasted $50 million insubmarine cable sales in 2008 and 2009 (compared to sales of $27submarine cable sales in 2008 and 2009 (compared to sales of $27million in 2006 and $5.7 million in 2007); production capacity omillion in 2006 and $5.7 million in 2007); production capacity off

30,000 kilometers per year30,000 kilometers per year OCC = Sold by Industrial Revitalization Corporation of Japan toOCC = Sold by Industrial Revitalization Corporation of Japan to

LongreachLongreach Group, a Japanese private equity firm founded in 2003.Group, a Japanese private equity firm founded in 2003.OCC announced contract for RussiaOCC announced contract for Russia--Japan cable in May, 2007Japan cable in May, 2007

Mitsubishi Electric = past supplier to KDDIMitsubishi Electric = past supplier to KDDI--SCS (now mostlySCS (now mostlyJapanese domestic systems)Japanese domestic systems)

TransmodeTransmode// LumentisLumentis = equipment contract for= equipment contract for BaltcomBaltcom systemsystem(2005): Baltic Sea(2005): Baltic Sea

Glimmerglass: developing crossGlimmerglass: developing cross--connect technologyconnect technology


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Over view of th eOver view o f th e

Afr ica n Su b m a r in e Ca b le M a r k e tAfr ica n Su b m a r in e Ca b le M a r k e t

I n t e r n a t io n a l Ca p a cit y I n fr a s t r u ct u r eI n t e r n a t io n a l Ca p a cit y I n fr a s t r u ct u r e


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I n t e r n a t io n a l Ca p a cit y I n fr a s t r u ct u r eI n t e r n a t io n a l Ca p a cit y I n fr a s t r u ct u r e

in Su bin Su b --Sa h a r a n Afr icaSa h a r a n Afr ica

Total worldwide investment in undersea fiberTotal worldwide investment in undersea fiber

optic cable systems, 1987optic cable systems, 1987--2007: $46 billion2007: $46 billion

(source: Terabit Consulting(source: Terabit Consulting Undersea CableUndersea CableReport 2008Report 2008 ))

Total investment in subTotal investment in sub--Saharan AfricanSaharan African

undersea fiber optic cable systems, 1987undersea fiber optic cable systems, 1987--2007:2007:

$934 million$934 million

MtunziniMtunzini, South Africa to Djibouti remains the, South Africa to Djibouti remains thelongestlongest unservedunserved coastline in the world (7,000coastline in the world (7,000

kilometers)kilometers)

Planned/proposed systems: $6.4Planned/proposed systems: $6.4bilbil

I n ve s tm e n t in Su bI n ve s tm e n t in Su b -Sa h a r a n Un d e r s ea I n fr a s t r u c tu r e b ySa h a r a n U n d e r s e a In fr a s t r u c tu r e b y


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I n ve s tm e n t in Su bI n ve s tm e n t in Su b --Sa h a r a n Un d e r s ea I n fr a s t r u c tu r e , b ySa h a r a n U n d e r s e a In fr a s t r u c tu r e , b y

R e a d yR e a d y--fo rfo r --Ser vice Da teSer vice Da te($Mi l lions ; exc lu des Sea($Mil lions ; exc lu des Sea --M eM e --W e a n d F a l co n s y s t em s )W e a n d F a l co n s y s t em s )

Investment in Sub-Saharan Undersea Infrastructure,

by Ready-for-Service Date ($Millions) (excluding Europe-Asia Cables)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

P

lanned

Proposed

SAT-2

Aden-

Dj ibout i

N iger ian

Fes t oon

MozambiqueNBTN

SAT-3/

SAFE

SAS-1Adon is

$1.5b

$4.9b

Th e Ea s t Coa s t :Th e Ea s t Coa s t :


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Th e Ea s t Coa s t :Th e Ea s t Coa s t :

P la n n e d a n d P r o p o se d Sys t e m sP la n n e d a n d P r o p o se d Sys t e m s

East African Submarine Cable System (East African Submarine Cable System (EASSyEASSy))

SeacomSeacom East African Marine System (TEAMS)East African Marine System (TEAMS)

FLAG Next Generation Network (NGN)FLAG Next Generation Network (NGN)

E a s t Afr ica n Su b m a r in e Ca b leE a s t Afr ica n Su b m a r in e Ca b le


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E a s t Afr ica n Su b m a r in e Ca b leE a s t Afr ica n Su b m a r in e Ca b le

(( EASSyEASSy))

Consortium of regionalConsortium of regionaloperatorsoperators

Cost$265 millionCost$265 million RFS 2009RFS 2009

Financing fromFinancing fromDevelopment FinancialDevelopment FinancialInstitutions (Institutions (DFIsDFIs))including Worldincluding World

Bank/IFC, EIB, ADB,Bank/IFC, EIB, ADB,AFD,AFD, KfWKfW

Supply contract signedSupply contract signed

with Alcatelwith Alcatel--LucentLucent


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SeacomSeacom

Investors:Investors: HeraklesHerakles (backed by(backed byBlackstone); Aga Khan Fund forBlackstone); Aga Khan Fund forEconomic Development (foundedEconomic Development (founded

by Princeby Prince KarimKarimAga Khan IV ofAga Khan IV ofPakistan) through IPS;Pakistan) through IPS;VenfinVenfin(led by South African Johann(led by South African JohannRupert); Convergence PartnersRupert); Convergence Partners(led by former South African(led by former South African DoCDoC

DGDGAndileAndile NgcabaNgcaba);); ShandukaShanduka(led by South African Cyril(led by South African CyrilRamaphosaRamaphosa);); NeotelNeotel has pledgedhas pledgedZAR 20 million for cable stationZAR 20 million for cable station

Cost$650 millionCost$650 million RFS 2009RFS 2009

Financing arranged byFinancing arranged byNedbankNedbankand Investecand Investec

Supply contract signed with TycoSupply contract signed with Tyco


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Ea s t Afr ica n Ma r in e Sys t em (TEAMS)Ea s t Afr ica n Ma r in e Sys t em (TEAMS)

PointPoint--toto--point system connecting Mombasa,point system connecting Mombasa,Kenya and Fujairah, UAEKenya and Fujairah, UAE

Proposed by Communications Commission ofProposed by Communications Commission ofKenya (CCK) in 2006Kenya (CCK) in 2006

Ownership:Ownership: GovtGovt. of Kenya (40%) and UAE. of Kenya (40%) and UAE

incumbentincumbent EtisalatEtisalat (15%), (Source: Kenyan(15%), (Source: KenyanInformation Permanent SecretaryInformation Permanent SecretaryBitangeBitangeNdemoNdemo, Oct. 2007). The remaining 45 percent, Oct. 2007). The remaining 45 percent

would be made available to other public orwould be made available to other public orprivate investors.private investors.

Supply contract awarded to AlcatelSupply contract awarded to Alcatel--Lucent inLucent inOctober, 2007: $82 millionOctober, 2007: $82 million

FLAG Next Gen e r a t ion Ne two r kFLAG Next Gen e r a t ion Ne two r k


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FLAG Next Gen e r a t ion Ne two r k FLAG Next Gen e r a t ion Ne two r k

(N GN) , Syst e m(N GN) , Syst e m --22

Reliance Group (India) purchasedReliance Group (India) purchasedFLAG Telecom for $207 million in 2004FLAG Telecom for $207 million in 2004

In December of 2006 FLAG announced a $1.6In December of 2006 FLAG announced a $1.6--billion globalbillion globalbuildoutbuildout known as the Nextknown as the NextGeneration NetworkGeneration Network

SystemSystem--2 would connect India and Kenya, with2 would connect India and Kenya, witha potential extension to South Africa anda potential extension to South Africa and

Reunion, and later Mozambique, Tanzania,Reunion, and later Mozambique, Tanzania,Madagascar, Mayotte, and MauritiusMadagascar, Mayotte, and Mauritius

RFS 2009 or 2010RFS 2009 or 2010

Th e W e s t Co a s t :Th e W e s t Co a s t :
http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991http://www.flagtelecom.com/index.cfm?page=3991


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Th e W e s t Co a s t :Th e W e s t Co a s t :

P la n n e d a n d P r o p o se d Sys t e m sP la n n e d a n d P r o p o se d Sys t e m s

InfracoInfraco South AfricaSouth Africa--EuropeEurope--South AmericaSouth America

GloGlo--1 (UK1 (UK--Nigeria)Nigeria) Project West Africa (Infinity)Project West Africa (Infinity)

MarocMaroc Telecom West Africa CableTelecom West Africa Cable

MAIN OneMAIN One

SATSAT--44

NEPAD Broadband Infrastructure Network /NEPAD Broadband Infrastructure Network /UhurunetUhurunet / 5/ 5--P NetworksP Networks ( P a n( P a n --Africa)Africa)

I n f r a c oI n f r a c o


32/42

I n f r a c o

So u th Afr icaSo u th Afr ica --E u r o p eE u r o p e --So u t h Am e r icaSo u t h Am e r ica

BroadbandBroadband InfracoInfraco Pty: 100%Pty: 100%--owned by SAowned by SAgovtgovt..

Proposed twoProposed two--cable system:cable system:Phase I South AfricaPhase I South Africa--Brazil (RFSBrazil (RFSAugust 2009) and Phase II SouthAugust 2009) and Phase II SouthAfricaAfrica--UK (RFS May 2010)UK (RFS May 2010)

Cost: $650 millionCost: $650 million August, 2007: VSNL (26%August, 2007: VSNL (26%

shareholder inshareholder in NeotelNeotel) pledged) pledged$200 million to project$200 million to project

Supply tender issued June 30,Supply tender issued June 30,20072007

At issue:At issue: InfracosInfracos fivefive--yearyear

exclusivity withexclusivity with NeotelNeotel ( 2012)( 2012)

GlGl 11


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GloGlo --11

GlobacomGlobacomwas awarded Nigerias second nationalwas awarded Nigerias second nationaloperator (SNO) license in 2002operator (SNO) license in 2002

GloGlo--1 cable: network connecting Nigeria and the UK with1 cable: network connecting Nigeria and the UK withpossible branchespossible branches

Supply contract awarded to AlcatelSupply contract awarded to Alcatel--Lucent as part ofLucent as part of

$650 million package contract for$650 million package contract for GlobacomGlobacom networknetwork Alcatels CS Ile deAlcatels CS Ile de BatzBatz undertook route clearance andundertook route clearance and

grapnel runs, and installation began in spring, 2007grapnel runs, and installation began in spring, 2007

As of October, 2007, installation extended from theAs of October, 2007, installation extended from theUnited Kingdom to SenegalUnited Kingdom to Senegal

Not yet in use: wet storage?Not yet in use: wet storage?

P j t W t Af i ( I fi it )P j t W t Af i ( I fi it )


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P r o jec t W es t Afr ica ( In fin ity)P r o jec t W es t Afr ica ( In fin ity)

Unveiled at NEPAD EUnveiled at NEPAD E--AfricaAfricaconference, 2005conference, 2005

Infinity WorldwideInfinity WorldwideTelecommunications Group ofTelecommunications Group ofCompanies (IWTGC): led byCompanies (IWTGC): led by

NigerianNigerianAdedoyinAdedoyinAdemilolaAdemilolaand American Robertand American RobertWoogWoog

Branched network connectingBranched network connecting

Portugal, Cameroon, Nigeria,Portugal, Cameroon, Nigeria,Benin, Liberia, Senegal, CoteBenin, Liberia, Senegal, Coted'lvoired'lvoire and Ghanaand Ghana

Cost: $500milCost: $500mil -- $750mil$750mil

MOU with VSNL in May, 2007MOU with VSNL in May, 2007

MM a r o c T l W t Af i C b lTe lecom W es t Afr ica Ca b le


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M a r o cM a r o c Telecom W es t Afr ica Ca b leTe lecom W es t Afr ica Ca b le

A west coast system to be interconnectedA west coast system to be interconnectedwithwith MarocMaroc Telecoms Atlas Offshore,Telecoms Atlas Offshore,connecting MTs west African subsidiariesconnecting MTs west African subsidiariesand investments (Mauritania, Burkina Faso, Gabon, andand investments (Mauritania, Burkina Faso, Gabon, andothers)others)

MarocMaroc Telecom: Moroccos incumbent operator, 51%Telecom: Moroccos incumbent operator, 51%controlled by Vivendicontrolled by Vivendi

Target RFS 2008Target RFS 2008

MAIN On eMAIN On e


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MAIN On eMAIN On e

MainstreetMainstreet Technologies: led byTechnologies: led byMs.Ms. FunkeFunke OpekeOpeke, who worked as, who worked asan executive at Verizon, as the chiefan executive at Verizon, as the chief

technology officer at MTN, and astechnology officer at MTN, and aschief operating officer ofchief operating officer ofNitelNitel fromfromlatelate--2006 to early2006 to early--20072007

Branched system from Portugal toBranched system from Portugal to

AngolaAngola Budgeted at $300 millionBudgeted at $300 million

Reportedly considering anReportedly considering anextension to South Africa, butextension to South Africa, butcompany representatives said thatcompany representatives said thatthey were a little disappointedthey were a little disappointedwith the South Africanwith the South AfricanGovernments attitude towardGovernments attitude toward

foreign operators.foreign operators.

NEP AD Br o a d b a n d In fr a s t r u ctu r eNEP AD Br o a d b a n d In fr a s t r u ctu r e


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Ne tw o r k / Ne tw o r k / U h u r u n e tU h u r u n e t / 5/ 5 --P N et w o r k sP N et w o r k s

Massive network connecting most of AfricaMassive network connecting most of Africato Europe, South America, and Asiato Europe, South America, and Asia

Target RFS: 2009 or 2010Target RFS: 2009 or 2010

Confirmed and rumored investorsConfirmed and rumored investors

5P Holdings (US company led by5P Holdings (US company led byMoolMool SinghiSinghi))

International Development Office of theInternational Development Office of thegovernment ofgovernment ofRasRasAlAl KhaimahKhaimah (an emirate in(an emirate inthe UAE)the UAE)

PanPan--African Infrastructure DevelopmentAfrican Infrastructure Development

Fund (PAIDF)Fund (PAIDF) Phelps Stokes Fund, an American 501 (c)(3)Phelps Stokes Fund, an American 501 (c)(3)

nonprofitnonprofit

SheikhSheikh SaoudSaoud of Qatar (rumored)of Qatar (rumored)

Initial NEPAD involvement inInitial NEPAD involvement in EASSyEASSy, then, thenNBIN, thenNBIN, then UhurunetUhurunet

NEPAD eNEPAD e--Africa Commission chair Dr.Africa Commission chair Dr.HenryHenryChasiaChasia is married to SAis married to SADoCDoC DGDGLyndallLyndall ShopeShope--MafoleMafole: critics in South: critics in SouthAfrican media have voiced concernAfrican media have voiced concern

NEPAD has promoted Kigali Protocol idealsNEPAD has promoted Kigali Protocol idealsfor all network infrastructurefor all network infrastructure

SATSAT 44


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SATSAT--44

Rumors of a successor to SATRumors of a successor to SAT--3 have been circulating for3 have been circulating forseveral yearsseveral years

System might be led by Telkom, Vodacom, and MTNSystem might be led by Telkom, Vodacom, and MTN Such a system would likely capture the lions share ofSuch a system would likely capture the lions share of

South African trafficSouth African traffic

Plans reportedly on hold pending resolution of TelkomPlans reportedly on hold pending resolution of Telkomand Vodacom ownershipand Vodacom ownership

Ot h e r Sys te m sOt h e r Sys te m s


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Ot h e r Sys te m sOt h e r Sys te m s

Adonis Festoon (Angola): RFS 2008Adonis Festoon (Angola): RFS 2008

West African Festoon System (WAFS)West African Festoon System (WAFS)

Namibia Submarine Cable ProjectNamibia Submarine Cable Project

negotiations with Angola and Botswana for regionalnegotiations with Angola and Botswana for regional

solution; possible extension of Adonis Angolansolution; possible extension of Adonis Angolan

festoon or interconnection with WAFS)festoon or interconnection with WAFS)

SeychellesSeychelles--Africa, Sri LankaAfrica, Sri Lanka--South Africa, MadagascarSouth Africa, Madagascar--

East AfricaEast Africa

Con clu s ion s : Glob a l Ma r ke tCon clu s ion s : Glob a l Ma r ke t


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Con clu s ion s : Glob a l Ma r ke tCon clu s ion s : Glob a l Ma r ke t

Probably a $1 billion annual market goingProbably a $1 billion annual market goingforward, with occasional spikesforward, with occasional spikes

Largest system owners: VSNL, FLAG,Largest system owners: VSNL, FLAG,Global Crossing, consortia, investmentGlobal Crossing, consortia, investmentfundsfunds

Leading suppliers: Alcatel, Tyco, NEC,Leading suppliers: Alcatel, Tyco, NEC,FujistuFujistu

Continued deployment on transoceanicContinued deployment on transoceanicroutes but increased investment inroutes but increased investment inregional marketsregional markets

Con clu s ion s : Afr ica n Ma r ke tCon clu s ion s : Afr ica n Ma r ke t


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Con clu s ion s : Afr ica n Ma r ke tCon clu s ion s : Afr ica n Ma r ke t

Almost a dozen credible systems haveAlmost a dozen credible systems havebeen announced for a total proposedbeen announced for a total proposed

investment of $6.4 billioninvestment of $6.4 billion Demand is robust in South Africa, Nigeria,Demand is robust in South Africa, Nigeria,

and Kenyaand Kenya However, there is likely to beHowever, there is likely to be

consolidation among proposed systems,consolidation among proposed systems,

and some projects will not succeedand some projects will not succeed NearNear--term demand justifies two fullterm demand justifies two full--

length systems on each coastlength systems on each coast

Th a n k Yo u !Th a n k Yo u !


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Th a n k Yo u !Th a n k Yo u !

Michael RuddyMichael Ruddy

Terabit Consulting, Inc.Terabit Consulting, Inc.

First Street CenterFirst Street Center

245 First Street, 18245 First Street, 18thth FloorFloor

Cambridge, Massachusetts 02142 USACambridge, Massachusetts 02142 USATel.: +1 (617) 444Tel.: +1 (617) 444--86058605

Fax: +1 (617) 444Fax: +1 (617) 444--84058405

Email:Email: [email protected]@terabitconsulting.com

http://http://www.terabitconsulting.comwww.terabitconsulting.com

20071128 Submarine Networks Africa Johannesburg Presentation

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Transcript of 20071128 Submarine Networks Africa Johannesburg Presentation