Issue 38, May 2008Regional Systems Issue

May 2008

#38RegionalSystems

Issue

An international forum for the expression of ideas and opinions pertaining to the submarine telecoms industry

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Submarine Telecoms Forum is published bi-monthly by WFN Strategies, L.L.C. The publication may not be reproduced or transmitted in any form, in whole or in part, without the permission of the publishers.

Submarine Telecoms Forum is an independent com mercial publication, serving as a freely accessible forum for professionals in industries connected with submarine optical fibre technologies and techniques.

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Wayne NielsenWFN Strategies

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Welcome to Web 2.0, and to the 38th issue of Submarine Telecoms Forum magazine, our Regional Systems edition.

I am pleased to announce that our very own SubTel Forum has leaped into the next generation of internet news supply! The SubTel Forum website has been completely reconstructed to offer a brilliant array of new interactive features, including a discussion board and a live RSS feed subscription. The RSS (Really Simple Syndication) feed will give up to the minute industry blog updates as well as formal news articles and industry announcements. For those new to RSS technology, such feeds will fit seamlessly with MS Outlook and other applications, notifying you instantly as industry news is received.

In addition, SubTel Forum magazine has also had a new facelift and now features new interactive elements that will enhance one’s reading experience. We of course will continue to offer some excellent industry insight for your consideration.

In this issue, John Manock outlines the exciting future cable market, while Robin Russell discusses some possible bumps in the road

ahead. Brett Worrall updates the progress of the PPC-1 system, as Iris Hong reviews the performance of Chinese telecom operators. Jim Case illustrates the benefits of desktop studies, and Guy Arnos discusses design challenges for undersea systems serving offshore production platforms. Jean Devos returns with his ever insightful observations, and of course, our ever popular, “where in the world are all those pesky cableships” is included as well.

With these new features, we hope you’ll agree that Submarine Telecoms Forum has embraced the true spirit of the internet, offering an enhanced forum for discussion about the issues that concern us the most.

Good reading, and welcome to Web 2.0!

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5 News Now

11 The Place of Regional Submarine Cable Systems in the Current Boom John Manock

16 PPC-1 Update – The Story So Far – Pipe International Week 15 2008 Brett Worrall

20 Submarine Telecommunication Desktop Studies – A Route Less Taken Jim Case

23 How Much is Enough? Robin Russell

May 2008

#38RegionalSystems

Issue

19 CTC

28 Global Marine Systems

22 Great Eastern

15 Nexans

5 OFS

44 STF Advertising

31 Submarine Network 2008

4 WFNS

25 Xtera

26 Avoiding the “Bends” by Specifying the Correct Fiber Tom Davis and David Mazzarese

29 Press Release: University Of Washington Request For Qualifications

30 Press Release: Reaching Out To The Multi-Billion Dollar Subsea Telecoms Market

32 Chinese Telecom Operators 2007 Performance Review Iris Hong

40 Design Challenges For Undersea Systems Serving Offshore Production Platforms Guy W. Arnos

45 The Cableships

51 Letter to a Friend Jean Devos

52 Upcoming Conferences

Engineering of submarine and terrestrial optical cable, microwave/WiMax /WiFi,mobile, satellite and RF systems for commercial, oil & gas and government clients

21495 Ridgetop Circle, Suite 201Sterling, Virginia 20166 USA

Tel: +[1] 703 444 2527www.wfnstrategies.com

A synopsis of current news items from NewsNow, the weekly news feed available on the Submarine Telecoms Forum website.

TELUS Selects Alcatel-Lucent’s ReachView to Deploy Next Generation Service Management Platform (May 27th, 2008)

Alcatel-Lucent (Euronext Paris and NYSE: ALU) announced that TELUS (TSX: T, T.A; NYSE: TU) has selected ReachView Technologies, an Alcatel-Lucent company, to deploy IBM Tivoli Netcool software into its network to deliver superior service and value to its customers while positioning the company for long-term growth. With this deployment, TELUS becomes Alcatel-Lucent’s 100th customer... [Read more]

E-Marine Showcased at ITU Telecom Africa 2008 (May 23rd, 2008)

E-Marine PJSC, the leader in submarine cable installation, maintenance and repair in the Middle East, participated in ITU Telecom Africa 2008, displaying some of its industry-leading services. The conference, which took

place at the Cairo International Convention and Exhibition Centre, Egypt, from 12-15 May, is a major networking platform for the region’s... [Read more]

AAG Installation Off Hong Kong Detailed(May 23rd, 2008)

In a filing to the District Council Members of Hong Kong, Reach Networks Hong Kong Limited has detailed its plans for the installation of the Asia America Gateway (AAG) transpacific cable in Hong Kong waters. The project involves the installation of two fiber optic telecommunications cables of approximately 10km in... [Read more]

Bid Process Begins for Underwater Research Network (May 23rd, 2008)

The University of Washington is soliciting Statements of Qualifications (SOQ) from

qualified firms or joint ventures to provide design-build services for the design and construction of a new ocean observing system, consisting of fiber optic submarine cable and undersea nodes off the coast of Oregon. The contractor selected to provide design... [Read more]

Alcatel-Lucent Continues to Lead the Fixed Broadband Access Market in Q1 2008(May 23rd, 2008)

Building on Innovation to Support Leadership in IP DSLAM and VDSL PARIS, May 23/PRNewswire-FirstCall/ — Alcatel-Lucent (Euronext Paris and NYSE: ALU) today announced that, following the publication of the Dell’Oro 1Q’08 access report*, the company remains the worldwide leader in DSL with 6.6 million DSL lines shipped in 1Q’08. With a cumulative market share in... [Read more]

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More Carriers Comment on EIG(May 16th, 2008)

Members of the Europe-India Gateway (EIG) submarine cable system consortium have begun issuing statements on their involvement in the project and the benefits EIG will bring to their respective countries. Oman Telecommunications Company (Omantel) Chief Executive Officer Dr. Mohammed Bin Ali Al-Wohaibi said that cable would significantly enhance capacity and diversity to serve... [Read more]

NEC Wins Contract for JAKABARE(May 16th, 2008)

NEC Corporation (NEC) has announced that it has signed a turnkey contract with PT Indosat, Tbk in Indonesia for the supply of a submarine cable system to the “JAKABARE” project linking Indonesia and Singapore. The “JAKABARE” Submarine Backbone Network will stretch over 1,300 kilometers and connect Jakarta (Java), Pontianak (Kalimantan), Batam... [Read more]

Pacnet Limited Closes Cash Offer for Pacnet Internet (S) Limited (May 16th, 2008)

Pacnet Limited formerly known as Connect Holdings Limited (the Offeror) wishes to announce that its voluntary cash general offer

(the Offer) for all the issued ordinary shares of Pacnet Internet (S) Limited formerly known as Pacific Internet Limited (PIL) other than those already owned by the Offeror (the PIL Shares) closed on 15... [Read more]

Verizon Business to Build and Manage Secure Global Network for U.S. Department of Homeland Security (May 16th, 2008)

Verizon Business will deploy and manage a secure global IP network linking thousands of U.S. Department of Homeland Security (DHS) sites under a new Networx Universal task order awarded by the agency today. Through an agreement valued at $678.5 million over 10 years, Verizon Business will serve as primary service provider under the... [Read more]

Global Crossing a Provider of Choice for Managed Security Services in Colombia(May 16th, 2008)

Global Crossing, a leading global IP solutions provider, today announced that it signed 54 new security service contracts in Colombia in 2007, underscoring the advantages of its managed security services and highlighting its new portfolio of Global Crossing Security Solutions for the enterprise sector. The deals include contracts with both new and... [Read more]

Pacnet Limited Closes Cash Offer for Pacnet Internet (S) Limited (May 16th, 2008)

Pacnet Limited formerly known as Connect Holdings Limited (the Offeror) wishes to announce that its voluntary cash general offer (the Offer) for all the issued ordinary shares of Pacnet Internet (S) Limited formerly known as Pacific Internet Limited (PIL) other than those already owned by the Offeror (the PIL Shares) closed on 15 May... [Read more]

EIG to Go through TE Transit Corridor(May 9th, 2008)

Telecom Egypt (TE) has announced the signature of a US$50 million contract with EIG in relation to its TE Transit Corridor. The geographic position of Egypt allows for an efficient crossing from the Red Sea to the Mediterranean Sea for submarine cable systems. TE being Egypt’s only fixed network operates the... [Read more]

Carriers Announce Europe India Gateway Cable (May 9th, 2008)

A consortium of 16 companies has announced plans to build a next-generation undersea optical cable system connecting Europe, the Middle East and India. The 16 telecommunications companies investing in the project are AT&T;

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Bharti Airtel; BT; C&W; Djibouti Telecom; Du; Gibtelecom; IAM; Libyan Post, Telecom and Information Technology Company; MTN Group Ltd; Omantel... [Read more]

EIG to Go through TE Transit Corridor(May 9th, 2008)

Telecom Egypt (TE) has announced the signature of a US$50 million contract with EIG in relation to its TE Transit Corridor. The geographic position of Egypt allows for an efficient crossing from the Red Sea to the Mediterranean Sea for submarine cable systems. TE being Egypt’s only fixed network operates the... [Read more]

Carriers Announce Europe India Gateway Cable (May 9th, 2008)

A consortium of 16 companies has announced plans to build a next-generation undersea optical cable system connecting Europe, the Middle East and India. The 16 telecommunications companies investing in the project are AT&T; Bharti Airtel; BT; C&W; Djibouti Telecom; Du; Gibtelecom; IAM; Libyan Post, Telecom and Information Technology Company; MTN Group Ltd; Omantel... [Read more]

Reliance Acquires UK Carrier(May 2nd, 2008)

Reliance Infocom BV, a division of Reliance Globalcom and wholly owned subsidiary of India’s largest integrated telecom operator Reliance Communications, has announced acquisition of a controlling stake in eWave World, a UK headquartered telco focused on the rapidly developing market for wireless telephony services using the WiMAX technology standard. Over the next 2-3... [Read more]

PIPE Raises Money for International Projects(May 2nd, 2008)

PIPE Networks Limited has announced that it has raised $26 Million by way of placement of 6.5 Million ordinary shares in the company at $4.00 per share to institutional and sophisticated investor clients of ABN AMRO Morgans Corporate Limited, Wilson HTM Corporate Finance Limited and Orbit Capital. This placement represents... [Read more]

Tyco Telecom Wins Contract for Main One Cable (May 2nd, 2008)

Main Street Technologies has announced the award of the turnkey supply contract for the Main One Cable System to Tyco Telecommunications. The cable system will span 14,000 kilometers and provide the much-needed high capacity for international and Internet connectivity to countries between Portugal and South Africa on the West coast of Africa. The... [Read more]

CTC Awarded LoFS Contract by StatoilHydro(April 25th, 2008)

CTC Marine Projects (a DeepOcean ASA subsidiary) has been awarded a LoFS contract by StatoilHydro as part of the Snorre FSM (Focused Seismic Monitoring) pilot project. The work will take place in the Norwegian sector of the North Sea utilising CTC’s Volantis newbuild vessel and PT-1 trencher. The work scope will involve... [Read more]

Alcatel-Lucent to Upgrade Greek Submarine Cables (April 21st, 2008)

Alcatel-Lucent is upgrading and expanding the existing transport infrastructure of the Hellenic Telecommunications Organization (OTE SA), Greece’s leading service provider, as part of projects valued at more than Euro 12 million. Alcatel-Lucent’s optical solutions currently under implementation will support OTE’s program to extend the distribution of high-speed services in major urban and regional... [Read more]

General Cable Announces Long-Haul Submarine System Award (April 21st, 2008)

General Cable Corporation has announced that its subsidiary, Norddeutsche Seekablewerke GmbH (NSW), has been awarded its first

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submarine long-haul repeatered fiber optic communications link project. The communications link will stretch through the Mediterranean Sea from Marseilles, France, to Port Said, Egypt, with additional connections in Italy, Turkey and Cyprus. The... [Read more]

TPE Files with FCC for AT&T’s Inclusion(April 21st, 2008)

The Trans-Pacific Express (TPE) consortium has filed with the FCC to modify its cable-landing license to add AT&T Corp. (ATTC) as a licensee. The TPE Network will directly link Mainland China, South Korea, Taiwan and the United States. ATTC will acquire a 9.43% interest in the international waters segments of the TPE cable... [Read more]

Nexans Wins Submarine Power Cable Contract (April 14th, 2008)

Nexans has been awarded a contract worth around 150 million Euro by Fingrid Oyj, the electricity transmission system operator in Finland, and Svenska Kraftnät, a state utility which runs the national electrical grid in Sweden. The contract is for the manufacture and installation of a High Voltage Direct Current (HVDC) submarine power... [Read more]

NTT Com also Joins TPE(April 14th, 2008)

NTT Communications (NTT Com) also has announced that it signed a construction and maintenance agreement to participate in a consortium building a new optical fiber cable system - the Trans-Pacific Express Cable Network (TPE). In the fourth quarter of 2006 the six original consortium participants - CNC, CT, China Unicom, CHT, KT and... [Read more]

AT&T Joins Transpacific Submarine Cable Consortium (April 14th, 2008)

AT&T Inc. has announced plans to increase the scope and resiliency of the company’s global network by joining a consortium to build a submarine cable network, named Trans-Pacific Express (TPE), that links Japan, Mainland China, Korea, Taiwan and the United States. TPE is a new, high bandwidth fiber-optic submarine cable currently being... [Read more]

NSW Successfully Tests New Repeatered Cable (April 14th, 2008)

NSW has announced that the sea trial for their new repeatered cable MINISUB R (0.6) has been an outstanding success. “This is a significant milestone for NSW, and represents a major step towards the repeatered cable

market. The results have once again proven the excellent quality of our cables and have thus put... [Read more]

Big Southern Cross Cable Upgrade for High Speed Broadband (April 14th, 2008)

The Southern Cross Cable Network is supporting the move to high speed broadband in Australia and New Zealand with the completion of the first stage of a big capacity upgrade. Southern Cross Director of Sales and Marketing Ross Pfeffer said that “on 31 March 2008 Southern Cross lit up another 260 Gbits of... [Read more]

Alcatel-Lucent Awards Submarine Network Installation Contract to CTC (March 26th, 2008)

CTC Marine Projects (a DeepOcean ASA subsidiary) has been awarded a submarine network installation contract by Alcatel-Lucent.The contract will be for an initial period of 6 months starting in June 2008, with options to extend for a further 6 months. CTC will employ a comprehensive Telecoms installation spread for the work, using... [Read more]

CTC Awarded Telecoms Contract by General Offshore (March 26th, 2008)

CTC Marine Projects (a DeepOcean ASA subsidiary) has been awarded a submarine

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Telecoms contract by General Offshore Ltd. for Post Lay Inspection and Burial work in the APAC region. The 40 day project uses CTC’s CMROV 3 cable maintenance ROV and commences in March 2008. CTC’s Telecoms General Manager, Paul Woodward commented... [Read more]

Phoenix Announces Membership In Association Of Diving Contractors (March 24th, 2008)

Phoenix International Holdings, Inc. (Phoenix) announced that the Board of Directors of the Association of Diving Contractors International, Inc. (ADCI) has approved Phoenix as a General Member. The ADCI Consensus Standards for Commercial Diving and Underwater Operations have been developed to promote a high degree of safety. As a U.S. Navy and... [Read more]

Verizon Activates U.S.-Mainland China Leg of Trans-Pacific Express (March 22nd, 2008)

Verizon Business is working closely with its Asian partners to activate the U.S.-mainland China portion of the Trans-Pacific Express (TPE) submarine cable in July, a month in advance of the Summer Olympic Games in Beijing, China. TPE is the first next-generation, high-capacity undersea system to link the United States with Mainland... [Read more]

E-Marine to Install TEAMS Under Contract from Alcatel-Lucent (March 22nd, 2008)

E-Marine PJSC, an Etisalat Services Holding Company, and the leader in submarine cable installation, maintenance and repair in the Middle East, has announced that it has been contracted by Alcatel-Lucent, to lay a 4,900-kilometer submarine cable between the United Arab Emirates and Kenya (TEAMS). This contract demonstrates E-Marines strong capabilities and presence... [Read more]

Pacific Crossing, Fujitsu Break 1 Tbps Mark in Transpacific Bandwidth (March 22nd, 2008)

Pacific Crossing Limited, the operator of the only independent, carrier-neutral transpacific cable system - PC-1, working closely with its technology partner, Fujitsu, has become the first company to operate a Terabit of lit capacity across the Pacific Ocean. The company has announced the completion of a systems-wide upgrade, which brings online... [Read more]

euNetworks Delivers Solution for XS4ALL(March 14th, 2008)

euNetworks, owner and operator of one of Europe’s highest capacity fiber networks and provider of mission critical communication infrastructure and services, has announced

that it has signed an agreement with Dutch Internet Service Provider XS4ALL. Under the terms of the agreement, euNetworks will deploy host¦nex - a high availability solution comprising private co-location... [Read more]

Gilat Satcom Invests in TEAMS(March 14th, 2008)

Gilat Satcom, a leading broadband network operator in East Africa, has announced that it will invest in The East African Marine System (TEAMS), the 4,900-km submarine cable that will run from Mombasa, Kenya, to Fujairah, United Arab Emirates. Gilat Satcom said in a statement that the investment would grant it access and rights... [Read more]

Alcatel-Lucent Wins Contract for Equatorial Guinea Cable (March 14th, 2008)

Alcatel-Lucent has signed a turnkey contract with the Government of Equatorial Guinea to roll out a new, domestic submarine cable network connecting the cities of Malabo, on the northern coast of Bioko Island, to Bata, on the continent. This new cable network will help reduce the digital divide by fostering the... [Read more]

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Another Measure of the Industry’s Health(March 14th, 2008)

As you know, we have been publishing a monthly tally in the NewsFeed of the number of contract awards and the amount of cable contracted for as a way to measure how healthy the submarine cable industry is and how the market is progressing compared with TSA’s forecasts. Recently, we have... [Read more]

NSF Delays Three Projects to Get Better Handle on Costs (March 14th, 2008)

After a decade of making their case to the U.S. National Science Foundation (NSF), scientists planning a major project for remote monitoring of the oceans thought they had cleared the final hurdle in December. That’s when an external panel blessed the $331 million venture, called the Ocean Observatories Initiative (OOI), and told NSF... [Read more]

Matrix Networks and Tyco Telecommunications Begin Main Lay Construction of Submarine Cable System Connecting Indonesia and Singapore(March 10th, 2008)

Matrix Networks Pte Ltd and PT NAP Info Lintas Nusa, together with its supplier, Tyco Telecommunications, a business unit of

Tyco Electronics and an industry pioneer in undersea communications technology and marine services, today announced the start of construction of the main lay portion of the Matrix Cable System. With the... [Read more]

WFN Strategies to Supervise ADONES Cable System Roll-out (March 10th, 2008)

WFN Strategies has recently announced the contract award by Angola Telecom for the provision of supervision support of the ADONES submarine cable system. ADONES consists of 1,500 kilometers of fiber-optic submarine cable, providing a backbone network for mobile traffic as well as broadband services covering the majority of Angola’s population... [Read more]

AT&T to Invest $1 Billion in Global Network and Services in 2008 (March 8th, 2008)

AT&T Inc. has announced plans to invest $1 billion in 2008 to continue the expansion of AT&T’s industry-leading network and portfolio of solutions for multinational companies with operations and applications in key markets worldwide. The 2008 program - which is 33 percent more than last year’s enterprise investment and more than... [Read more]

Alcatel-Lucent, Fujitsu to Upgrade SEA-ME-WE-4 (March 8th, 2008)

Alcatel-Lucent and Fujitsu have announced that they will be upgrading the capacity of the SEA-ME-WE-4 submarine cable system that connects numerous countries from Singapore to France. With completion scheduled in 2009, this multi-million dollar second upgrade project will further double the existing trunk capacity of the system, going beyond the... [Read more]

Akamai Selects Etisalat for Locating its Servers in the Middle East (March 8th, 2008)

Etisalat Carrier & Wholesale Services has announced that Akamai Technologies, Inc., the leading global service provider for accelerating content and applications online, has installed servers and agreed to leverage the Emirates Internet Exchange (EMIX) as part of providing services for customers reaching out to end-users in the United Arab... [Read more]

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Times are good for the submarine cable industry. After the drought of 2002-2004 and a slow recovery period, the industry as we approach the middle of 2008 is booming. Cable systems of every size are being installed, suppliers are booked, cable ships are in demand and investment money is readily available.

We at TSA call our annual review of the submarine cable market the TSA Radar Screen Report™. We chose that name during the depths of the drought to evoke the image of a lonely radar operator scanning for blips out on the horizon – blips representing submarine cable projects at a time when there was virtually no activity in the industry.

When we published the January 2008 edition of the report, we noted that the title could

evoke a different image – that of a radar screen now being watched by an air traffic controller at a busy metropolitan airport. We, as an industry, have moved from scanning for distant opportunities to trying to manage a vibrant market growing so fast that it has begun to tax the industry’s manufacturing and installation capabilities.

In our January report, we identified 93 upcoming submarine cable projects. By April, this had grown to 116 projects – a 25% increase in the number of projects in only four months.

So what types of projects are driving the industry during this boom period?

Perhaps most notably during this current boom, transoceanic cable projects have reemerged as a major growth engine. This is noticeably different from the recovery period of 2005-2007, in which virtually all of the growth came from regional systems. As with most industries, the big projects are the ones that get most of the attention and the media has literally drooled over developments involving the transpacific cables – four of which are under development across the Pacific Ocean.

A casual review of Google hits for news on plans for new submarine cables during the first three months of 2008 shows that the most covered news stories of the year were the transpacific cables and the projects linking Australia to Guam and Hawaii.

And Google itself not only tracked the news but helped make the news too. The most widely publicized development in the industry

during 2008 was Google’s formal announcement that it would be a member of one of the transpacific consortia, Unity. This January announcement, as with most announcements involving Google, set off a blogging frenzy that was matched only by the disruption

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Jan-08 Apr-08Figure 1 - Number of Projects Tracked by TSA’s Radar Screen Report™, January to April 2008

The Place ofRegional Submarine

Cable Systems

in the Current Boom

By John Manock

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of services later that same month due to the cutting of several cables off Egypt and Dubai.

This public obsession with transoceanic cable projects raises an interesting question, “What place do regional submarine cable systems hold during this boom?”

As some of you may already know from other articles I have written, I am a proponent of definitions. I like to define exactly what I am talking about for the sake of consistency. And so, to be consistent, I am going to start out be defining the term “regional systems.”

For the following analysis, I chose to define a “regional system” as one in which no single segment is longer than 4,000 kilometers and which is international in scope. This is not entirely arbitrary since the optical transmission solutions for systems having span lengths up to this range have become a very interesting niche within the industry as compared with ultra long-haul systems. While some would argue for a slightly higher or slightly lower threshold, the 4,000-km span is a useful break-point for parsing the systems data that we have available to us.

Also for consistency, I will look at the market over time by ready for service date, rather than when the cable (and associated repeaters, dry plant, etc.) was or is to be manufactured. This methodology has proven effective for TSA to make broad comparisons of the development of the market over time.

Lastly, I have dropped from this analysis any discussion of “short” (less than 100 route-kilometers) domestic cable systems as these are not relevant to the discussion and forecasting their deployment five years leads to a whole new series of issues that we do not need to get into for the purposes of this article.

Using these parameters, it is clear that during the recent recovery period of 2005-2007, regional cable systems accounted for over

90% of the market for new submarine cable by route-kilometer. This is logical, as there were no transoceanic systems entering service and the domestic cable projects, although sometimes numerous, were of such short lengths so as not to impact the market significantly by comparison.

An analysis of current market data, however, shows what impact the transoceanic and other

large-scale systems have had on the market. The 116 major submarine cable projects that TSA is currently tracking in our TSA Radar Screen Report™ represent over 450,000 route-kilometers of cable – an average of about 4,000 route-kilometers per project. By comparison, the 2006 report had 63 projects averaging about 2,400 route-kilometers per project. Clearly, the size and scope of projects are increasing, as well as their number.

So how do regional systems measure up now? Of the 116 projects, 69 are regional systems, 27 are large domestic systems and 20 are large-scale projects – transoceanic or otherwise not conforming to our definition limiting regional systems to those in which no segment is greater than 4,000 route-kilometers.

In terms of route-kilometers for these 116 projects, the large projects have overtaken regional ones. The total route-kilometers for the 20 large projects is approximately 210,000 km, or a little over 45% of the total market, while the regional systems total 180,000, represent 39% of the market. Large domestic projects

(led by Indonesia’s 30,000+ route-km Palapa Ring) make up the rest.

Now let’s look at the numbers a slightly different way, based not on all the systems that are under development but by the those that are likely to enter service within the five-year period of 2008 through 2012, taking into account the industry’s manufacturing capacity during the period. This gives us 42 regional

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Regional

Large domestic

Transoceanic

Figure 2 - Distribution of Projects by Type

What place do regional submarine cable systems hold during this boom?

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systems, 15 transoceanic systems and 18 large domestic projects, totaling approximately 330,000 route-kilometers.

By route-kilometers, the proportions between these projects shift even more towards the large transoceanic systems. Regional systems, although much more numerous, total about 110,000 route-kilometers, while transoceanic systems account for approximately 160,000 route-kilometers. This gives regional systems about 33% of the market to nearly 49% for transoceanic systems.

Taking the average annual deployment of these systems, the demand for submarine cable to satisfy the deployment of regional systems will be about 22,000 route-kilometers per year through 2012, while demand for transoceanic systems will be about 32,000 route-kilometers per year.

Although transoceanic cable projects may have overtaken regional systems on a route-kilometer basis, it is clear that regional systems remain an important growth driver for the market.

So why has the regional systems market remained so strong?

The single most important driving force

behind the demand for regional submarine cable systems is the economic health of the countries being connected. Only a theory a few years ago, the impact of inexpensive, reliable broadband services on a nation’s economy is now a fact. A January 2008 study by the Internet Innovation Alliance, for example, said that a universal broadband program in the United States would positively impact the economy by US$134 billion. United Nations

Secretary General Ban Ki-moon has described access to the Internet as a basic human right.

Meanwhile, the economic damage caused by submarine cable outages has been well document in recent years. A July 2005 cable outage near Pakistan caused heavy economic damage including the loss of 3,000 jobs in call

centers located in the country. The December 2006 Taiwan earthquake, while having little impact on life and property, damaged almost all of the submarine cables serving Southeast Asia and caused extensive economic disruptions in the region. And the recent Middle East cable breaks in January and February of this year caused such economic damage that some thought it was the prelude to war.

The impact that broadband has on an economy pushes the development of submarine cables in two ways. First, there is the need simply to have a submarine cable landing in the country. This eliminates the bandwidth constraints of satellite and gives a country the opportunity to have broadband services. Many of the regional cables that have been built in the past few years, as well some of those under development of the future, are the first cables to land in many countries. Countries, however, need not

just sufficient capacity to provide broadband services, but affordable, and reliable capacity.

This leads to the second way in which the economic necessity of broadband services provides the impetus for new cable projects – the need for more than one submarine cable to land in a country. Affordable capacity is

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Transoceanic Regional Domestic

All systems

Systems likely for RFS2008-2012

So why has the regional systems market remained so strong?

Figure 3 - Percentages of Upcoming Projects by Type

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usually brought about by a country’s second, third or even fourth cables, when competition drives prices down. Reliability also demands more than one cable.

The need for reliability is an interesting driver of new cables. The spectacular cable outages described above have brought to the forefront the absolute necessity for redundancy at every level of the network.

The economic impact of these disasters was a wake-up call to governments in realizing how vulnerable their economies are to cable breaks and Internet outages. This, in turn, has caused governments throughout the world to examine their country’s strategic place within the global submarine cable network communications fabric and how they can make sure there is enough redundancy to protect against future outages.

The examples of cable outages around the world have also brought governments’ attention to a wide variety of issues regarding redundancy. Even if a country has two submarine cables, there is still great vulnerability if they both come into the same cable station. So governments are promoting not just additional cables by additional cable stations. And how much security do redundant submarine cables provide if there is only one cable station and one backhaul route from the station to the national network?

Countries that represent small markets have long had difficulty making a strong financial case for building or landing any submarine cables at all. It was for a long time argued that they could not justify spending the money for a cable as the small size of the population or the population’s economic condition would

not provide enough subscribers to recoup the investment in the cable. A small market getting one cable was difficult enough to justify, but getting two or more cables to provide redundancy and bring down costs was nothing short of impossible.

Few things have changed more dramatically in the industry than the ability for small markets to attract development of new cables. No longer is a submarine cable seen as an expensive luxury to these small markets – it is now a necessity.

These factors all drive the development of regional submarine cables and there is reason for optimism that this market will continue to thrive as countries look for more and more capacity and redundancy in the future.

John Manock is the Director of Information Services at T Soja & Associates, Inc. He is responsible for creating and maintaining TSA’s databases on fiber optic submarine cable systems. He is also the editor of

TSA NewsFeed, a daily information services exclusively for TSA clients focusing on news and events affecting the submarine cable industry.

Mr. Manock specializes in the development of information services for carriers, developers, and suppliers. He has over 18 years of experience in the fiber optics and telecommunications consulting business during which he has participated in numerous studies on submarine cable systems. He has also published numerous articles for the industry and is a frequent contributor to industry publications including SubTelForum and Soundings Magazine.

Mr. Manock received a master’s degree in Library and Information Studies from the University of Rhode Island and bachelor’s and master’s degrees from Providence College.

Countries, however, need not just sufficient capacity to provide broadband services, but affordable, and reliable capacity.

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Because so much of your performance runs through cables

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installed at 2350 metre in the Gulf of Mexico.”

Telecom:Rolf BøePhone: +47 22 88 62 23E-mail: rolf.boe@nexans.com

Oil & Gas:Jon SeipPhone: +47 22 88 62 22E-mail: jon.seip@nexans.com

Nexans was the first to manufacture and install a 384 fibre submarine cable. Nexans has qualified and installed their URC-1 cable family for fibre counts up to 384 fibres.

For further information please contact:Nexans Norway ASP.O. Box 6450 EtterstadN-0605 Oslo NorwayPhone: +47 22 88 61 00Fax: +47 22 88 61 01

scan

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At submarine depths, Nexans goes deeper

16

As I sip my first coffee for the day, the phone rings, it’s Bevan. “What’s the latest?” he asks. Bevan Slattery is my boss and one of the founders of PIPE Networks. At the moment he is like an expectant father awaiting the birth of his first child, PPC-1. “Not much,” I say, when in fact there is an awful lot going on but it is all under control, at least at this time of the morning.

PPC-1 is the name of our project and is short for Pipe Pacific Cable -1. With our turnkey supplier Tyco Telecoms commencing the PPC-1 survey this week in Guam this is no time to relax, yet it is opportune to reflect on the progress that has been achieved by the PIPE team to date and to review what’s around the corner.

Since the launch of its first peering/IX point in May 2002, PIPE Networks is now recognised as Australia’s largest peering provider and operates 16 IX points in 6 cities with over 130 active connections. A logical growth path was to enter into the international wholesale market and with the signing of a MOU with VSNL (now Tata) in December 2006, we were set on a path to expand on the already successful PIPE Networks business model and PIPE International was created with a mandate to build a trail blazing new international cable named PPC-1.

Overview

PPC-1 is a two fibre pair, 1.92Tbs trunk and spur system, that connects Sydney to Guam via the waters of Papua New Guinea. Figure 1 shows the route of PPC-1.

Guam is an ideal location to land PPC -1 as it forms a logical interconnection point for current and future cables. Since Guam is already a major international communications gateway it provides our customers with a multitude of onward connectivity and cross connect options. The PPC-1 system has four

PPC-1 Update The StorySo Far –

PipeInternationalWeek 15 2008

By Brett Worrall

branching units that allow for Day 1 and Day N connection to the system. In a first since the 1960’s, PPC-1 will be the first ‘new’ cable to land in PNG. PNG has recently re-deployed the retired Pacrim West cable (dubbed APNG2) into Port Moresby. PPC-1 will provide much needed cable diversity to APNG2, at the same time will provide domestic connectivity options for Papua New Guinea via connections to Madang and in the future to Port Moresby. Telikom PNG is an important customer and partner of PIPE International.

With our partner Tata Communications, we are offering wholesale capacity services between Australia- Guam and onward destinations as shown in the following table. Key to the

Figure 1 Route of PPC-1

17

success of PPC-1 has been our ability to seamlessly integrate an end to end solution with Tata Communications to provide end to end wavelength products from Australia to Japan and the USA.

Key Statistics of PPC-1

Feature ValueTrunk Length 6900 km approxDesign Capacity 1.92Tb/sDay 1 Capacity 140 Gb/sNumber of fibre pairs

2 ( 4 in S1.1)

Capacity Products 2.5G unprotected wavelengths 10G unprotected wavelengths

A/Z locations Sydney EquinixSydney Global SwitchSydney CLS, Guam CLSJapan CLS, Japan EquinixUSA CLS, USA Equinix SJC

Expected Latency TBA Branching units 3 x OADM broadband

1 x passive BU off SydneyMax Depth TBABurial 1.5 M burial to 2000 M off

Sydney, Australia 1.0 M burial to 1000M off Madang, Papua New Guinea

A number of Innovations

In a first for Australia, PPC -1 has utilised the latest in optical add drop and passive branching unit technology. We elected in the design to install branching units for future connections off Sydney, Brisbane and Port Moresby. The branching unit off Madang will be terminated at Day 1. The branching unit off Brisbane could serve Brisbane or indeed points further east as demand arises. Since placing the contract with Tyco we have already announced a MOU with Kordia to develop PPC-2, a connection from the branching unit off

Sydney to the North Island of New Zealand. Branching units have been installed in the past (for example AJC to create diverse shore end landing) but to our knowledge PPC-1 is the first system to pre-install a branching unit for future use in Australia.

Landings

Figure 2 shows the seaward approaches off Sydney and the approximate positioning of our branching unit one. We land at Collaroy beach via a HDD into a new facility we are building in Cromer. We have applied for, and received, our ACMA Protection Zone permit to land the cable. Work is happening apace with the landing point arrangements, including the installation of one of the longest HDD bores we are aware of at just on 2000m. The construction of a new combination data centre and cable landing station in Cromer is underway with first data centre customers being connected up this year in advance of the PPC-1 RFPA in 2Q 2009. This Cromer site will house the power feeding equipment and submarine line terminal equipment and has generous capacity for customer co-location. It will be serviced by 100% diverse PIPE Networks terrestrial fibre

or backhaul services into the major Sydney city POPS of Global Switch and Equinix.

In Madang, a new building is being constructed by Telikom PNG adjacent to the SEACOM landing point. In Guam we are co-locating in the Tata Piti TGNP facility using a pre-existing spare cable duct of TGNP to land the cable.

Customers and Products

We have already contracted a number of major customers who have requirements from Sydney to the USA. We are offering 10G and 2.5G wavelength or SDH framed services. In Australia we are also offering dark fibre products from the CLS in Sydney to the city POPS of Equinix or Global Switch. Intermediate drop points are indicated in the table above. Our philosophy is to be open and to provide our customers with a solution that meets their current needs and has a clear and unobstructed upgrade path to higher capacities with lower unit costs.

Technology

A key piece of technology used on PPC-1 is the Optical Add Drop Muliplexing Branching

Unit (OADM BU). The OADM BU allows PPC-1 to service thin route add/drops off one fibre pair without the added cost of back to back SLTE transponders at these intermediate points for capacity that is expressed end to end. A second advantage is that “express” traffic never needs to be routed over the spur cables so is by definition more secure (i.e. stays in deep water). A third advantage is that for restoration purposes some protection/restoration traffic can be routed to the spurs as required and this can be done without interrupting the main express traffic Sydney to Guam. Figure 3 depicts a simple example of using a OADM BU to connect Madang.

Depth in Fathoms

Gondwana-1

Northern Sydney Cable Protection Zone

Figure 2 Cable Crossing Sydney

Guam is an ideal location to land PPC -1.

18

As mentioned at the outset, Tyco Telecom is our system supplier on PPC-1. We signed a supply agreement with Tyco at PTC this year on January 18th 2008. Manufacturing is well underway and our survey commences 22nd April 2008 from Guam southwards. Using the latest in multi-beam echo sounding sonar equipment we will select a secure, economical, and maintainable route for PPC-1. Following in the footsteps of the SEACOM co-axial cable, PPC-1 will traverse several regions of complex bathymetry as it transits PNG waters on its way to Guam.

Regulatory

It was with some degree of trepidation late last year we entered the murky waters that represent the various permitting and regulatory regimes and permissions that one must receive in order to install, own, and operate an international cable system. I must confess that although at times it is a little convoluted to a simple engineer, the process overall to date has been relatively painless, although I have to admit that our permitting manager has been working the phones pretty hard for the past nine months; having said that, I definitely commend ACMA for the protection zone concept as a good example of a streamlined process.

Regulatory summary at the moment is:

• FCC and Team Telecom cable landing licence process underway expect a decision 3Q this year

• PNG Permission in Principle has been received.

• Australian ACMA Protection Zone permission as been received, the Non Protection Zone application is under formal review.

• All cable crossings have been agreed in principle with survey to confirm the final engineering procedures.

• Guam state permitting is underway with a CZMA application and Army Corp of Engineers Application being submitted in early April 2008.

Operations

As our parent, PIPE Networks, runs an extensive VLAN/MPLS Ethernet product already in Australia we are planning to complement our capabilities in this area with a new NOC in Sydney at the Cromer CLS site. This NOC will be supported by our existing NOC in Brisbane and jointly they will be responsible for the end to monitoring, reporting and operations of the PPC-1 network.

Back to now

After discussing what is happening on the project for several minutes, Bevan is satisfied for now and in a flurry of “ seeya, gotta go, bye” he is gone and the line is dead. I reach for my now cold cup of coffee and reflect that life will never be dull while we are building PPC-1. Please check out our blog at www.pipeinternational.com from time to time for more updates on the progress of PPC-1.

Brett Worrall is Chief Operating Officer for PIPE International. Mr Worrall is an industry veteran, having held engineering and marketing positions in Alcatel Submarine Networks both in Australia and abroad. In 1997 Mr. Worrall

was appointed Director Asia Pacific for Tyco Submarine Systems in Singapore. Since June 1999 Mr. Worrall has been consulting in the submarine cable industry, most recently for Azea Networks and PIPE Networks. Mr. Worrall was responsible for the procurement process and start up phases of the PPC-1 project.

Guam10

2

Madang2 2

Sydney

Drop 1 Add 1

Future wavelengths

One direction shown

10

2

Figure 3 OADM BU

...life will never be dull while we are building PPC-1...

CTC Marine Projects

Technology Leader

Tel: +44 (0) 1325 390 500Email: marketing@ctcmarine.com ctcmarine.com

Ploughs Trenchers ROVs

20

This article will attempt to walk you through the events surrounding the start, middle and end of a submarine telecommunications desktop study from the viewpoint of the data gatherer, map maker and route planner. A fact finding journey this is not, but should provide some enlightenment to those that have not done one and a bit of amusement for those who have.

The question I receive most often is “Why go through the exercise at all?” The answer is simple, to learn how much you don’t know about the seabed and nearby waters between the landing points in order to reduce risks and costs related to the fact finding mission we all know as the cable route survey. Of course, in the end it is all about protecting the cable while reducing cable length and yes, cost.

You start with two points…and little else

One would think that after completing a few submarine telecommunication desktop studies we would learn that they almost always start with a vague description of two remote beaches located on either side of a body of water. Someone has geographic coordinates, but choose to remain anonymous. In order to learn about these nefarious locations blood has to be submitted for purity testing and an obligatory signing of a non-disclosure agreement takes place. Once passing the test and signing

we place a couple of large dots on a map of the world and say, “Draw a line between them and see how much cable this is going to take.” The lines tend to intersect major land masses and other vulgarities the eventual cable system must avoid, but we can overlook that for now. The cost of cable determines if wallets are deep enough to proceed further. This step basically defines the project.

The waiting place…

Now that we have two (usually more) points and a line between them we must wait for the cable system to receive funding. This phase can take a while (i.e. years) and usually involves moving the points around a few dozen times so that the bandwidth is located appropriately. We all know that there are really only a few good places to land a cable, both

SubmarineTelecommunicationDesktop Studies – A Route Less Taken

By Jim Case

from an economic and geomorphological viewpoint, but let’s not muddy the waters just yet.

Data, data everywhere and not a byte to believe

So we grossly know where the cable system may be installed eventually. Now we need to find all of the public, private, government and institutional data available on the planet to “engineer” a route. It is not so much engineering as it is art. That is not a bad thing. Layering and blending the data to visualize a path along the seabed is art, albeit done using sophisticated GIS systems, spatial databases and a seasoned eye.

This part of the process would consume the data gatherer forever, unless bounds are placed on the types of data to be searched. Of course, new types will be discovered along the way and more than likely added, but we need a place to start. Here is a brief listing of the data types typically searched for: aerial photos, aids to navigation, anchorage areas, bathymetry, bottom type, cables (all types and stages of installation/planning), coral reefs, coastlines, dumping areas, EEZ and UNCLOS boundaries, fish havens, historical lands, marine managed areas and sanctuaries, military exercise areas, nautical charts, obstructions, offshore recreation zones, offshore structures, pipelines (all types and stages of installation/planning), reserves, satellite photos, sewage outfalls, submerged features, topography, unexploded ordinance, whale sanctuary boundaries and wrecks. There are many more data types but I think you get the picture.

We just trolled, grappled and dredged for an assortment of data that contain levels of reality. It is important to categorize how trustworthy the data provider is and perform an in-depth quality check on the data in order to make route engineering decisions later. This is one of the most important steps and is effectively the task of creating metadata about the data you have gathered. This is best stored in a database with linkage back to the data provider to query on later in the visualization stage.

21

But where is it really?

Okay, so now we have data, which was hard enough to find. What makes the next step really challenging are determining the various projections and datums to place the data on the surface of the Earth correctly. After wading though the data’s metadata (if you are lucky) and consulting Google (more realistic), each discreet data layer is tagged with an acceptable projection and datum. These data layers are now ready to be digested by a spatial database and/or GIS system for visualization.

Do you have a permit for that?

The dreaded permitting phase of the project is managed before, during and after the desktop study. Depending on where the landing points have been chosen, permitting can be a very procedural process or become a political nightmare. All of the data used to design the route will be used to solidify the permitting for the cable system. Site visits are a crucial element to getting both the desktop study and eventual permitting completed properly. This step is sometimes overlooked or shrugged off as not being necessary as part of the desktop study. It has proven essential every time for one simple reason: if the landing is not feasible after visual inspection a whole new route will need to be chosen for that shore end. If this is discovered late in the program much time is wasted investigating data sources and acquiring permitting for a landing that will never be.

The fun part…route engineering

As stated earlier, route engineering is more of an art than true engineering. Sure, there are cable design considerations, geohazard assessments and other engineering aspects to the route design but the real key is having cable route survey, installation and maintenance experience to “see” where the cable should be placed. The route is moved about the GIS screen a considerable number of times before coming to rest on the seafloor as the pre-survey route. Many people will debate where the route should be placed based on their own experiences in different parts of the world so compromise is critical when planning a route. This aspect to

route design can be tricky since the degrees of experience are unique to each individual. If this nuance is embraced a very effective route working group can be formed to design a well engineered cable system.

After all this, we still need to print?

Making maps has always been and is still a very tedious part of the overall process. Numerous data layers were turned on and off in rapid succession during the route engineering phase that now need to be statically visualized at an appropriate scale suitable for printing and plotting. Tradition dictates creating maps along the route between 1:10,000 and 1:20,000 scale, which can translate to hundreds of individual maps. There is a better way through web mapping.

Web mapping enables the route working group and customers to visualize each data layer individually or in groups. The controls are easy enough and the power to “see” the route as it was intended to be seen is a very powerful feature of web mapping. A nice feature of web mapping is the virtual route working group meetings that can take place. Significant time and travel costs are avoided and the overall timetable for the cable design phase is reduced.

The backend spatial database and GIS system all have hooks to provide their data in a web mapping format. Delivery of the data and maps are done electronically over the internet as soon as they are ready, speeding the processes even further. The technology is mature so let’s make use of it and save some of those tall terrestrial carbon sinks to balance the diesel we must consume surveying and laying cable.

Were we even close?

The pre-survey route has been chosen. The desktop study report is delivered. Now the question is how close will the pre-lay, surveyed-in route compare in geographic location and even more importantly route length when compared to the pre-survey route. If the data was gathered with an eye towards visualization and the fidelity of the metadata was preserved, the deltas can be

Draw a line between them and see how much cable this is going to take.

extremely low. A route just planned for BP in the Gulf of Mexico only changed by a few hundred meters overall. There have been other pre-survey routes where the scarcity and quality of the data meant thousands of meters of cable difference.

Questions?

Is the desktop study really worth doing? Let us compare the cost of the desktop study to one day’s cost of a fully loaded route survey vessel. If a survey vessel can survey in 300 kilometers of route in 24 hours and in shallow water has 12 lines to run to cover the 1 km swath width that roughly equates to 25 line kilometers of data acquired on that day. If the cable route is poorly chosen and 50 line kilometers are added to the overall length in shallow water that equals the cost of the desktop study. There are many other factors that need to be taken in to account. For instance, if the pre-survey route was placed on top of very complex geology that requires extra investigation using more subbottom profiles than planned, even more ship time is wasted.

This suggests the desktop study is worth doing based on cost benefits alone. Having a thorough understanding of the route and what others have learned about the waters and seabed over the course of history are worth their weight in armor.

Jim Case is the Database Administrator for the Center for Coastal and Ocean Mapping at the University of New Hampshire with overall responsibility for data and database infrastructure, including servers and software, including the maintenance of the U.S. Law of the Sea database for NOAA. He received a BS in Ocean Engineering from the Florida Institute of Technology, and technical areas of expertise are relational and spatial database development, GIS programming and IT development. He joined WFN Strategies in 2005 as GIS Specialist for Database Administration, and has supported telecom projects in the Gulf of Mexico, Pacific, Indonesia, Russia, Caribbean, North Sea, West Africa and the North Sea.

www.greateasterngroup.com

Shallow Water Turnkey Solutions For Fiber Optic Cable SystemsFrom Shallow Water Installations To Terminal

Station Design & Fabrication

23

In my last article for SubTel Forum, written in January 2007, I discussed diversity from a somewhat abstract perspective, although in the shadow of the multiple cable outages caused by the 26th December 2006 Taiwan earthquake. Since then, we have seen quite a few announcements of new submarine cable projects in the Pacific. Some of them are rapidly approaching ready for service status. It seems appropriate, then, to address the practical question that I have been asked many times in the past year or so: Are there going to be too many cables in the Pacific?

How Muchis Enough?

By Robin Russell

When AJC announced Ready for Service, in December 2001, things had changed quite a lot. The terrorist attacks on the World Trade Center on September 11th 2001 had dented confidence throughout the business world. After the dotcom bubble and the telecommunications bubble, the booming submarine cable market was suddenly looking like a bubble as well. By 2002, the good old days had turned into the bad old days.

Part of the problem was that one of the fundamental realities of the submarine cable business had been overlooked: no matter how much capacity your cable has got, you can only put the amount you can sell in the denominator when you calculate unit costs. Essentially, all new cables, including AJC, have design capacity of at least 1,000 Gbit / sec, but that is irrelevant if it can’t be sold. Even wise old hands, who well understood this principle, were burned when it turned out that the forecasts of demand were wildly inflated.

Reality based pricing

In the submarine cable business, what I call reality based pricing is just a manifestation of the economic truth that price is determined by supply and demand. However, it is a special case of that economic truth. The reason it is a special case is that, with advances in cable network technology, in some smaller markets the supply from even a single cable system might as well be infinite, it is so unlikely to be utilised fully within its service lifetime.

Accordingly, reality based pricing is a situation where price is determined mostly by demand. To understand what this means, consider the example of a market where the total demand for international capacity is 2 x 10 Gbit / sec wavelengths (this is not

Another way this question has been phrased is: Is the wheel turning back to the bad old days?

What made the bad old days bad?

When the Australia Japan Cable (AJC) network was conceived and financed, in 1999 / 2000, it was still the good old days. Demand growth forecasts soared in exponential curves, banks stood ready to lend billions of dollars, cable ships were booked solid for years and it was impossible to obtain manufacturing slots in the cable and repeater factories.

24

so unlike the market for ex-Australia capacity back in 2002). If this market is growing at, say, 35% pa compound, then the demand for new capacity each year is:

Gbit / sec Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7

New Demand 0.7 0.9 1.3 1.7 2.3 3.1 4.2

Let’s say a new cable is to enter this market, and we assume it will get 50% market share, it costs $1 billion to build, its owners want to reach break-even by the end of year 7, and all recurring costs are recovered by O&M charges. If we ignore the effects of time and costs of financing to simplify, then reality based pricing dictates that, with sales of seven wavelengths expected, the capacity should be priced at no less than $140 million per wavelength.

If the market were growing at, say, 60% pa compound (this is nothing like the market for ex-Australia capacity by the way, I wish it were), we get a very different demand table:

Gbit / sec Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7

New Demand 1.2 1.9 3.1 4.9 7.9 12.6 20.1

On the same assumptions, using reality based pricing the capacity can now be priced at $39 million per wavelength. Even in this second example, less than thirty wavelengths are sold, when even a single fibre pair can support close to a hundred.

It is clear that, even though the cost of providing a submarine network might be roughly the same, reality based pricing dictates that the price of capacity can be very different in markets with different levels of demand.

What is happening in the Pacific?

The most important thing is that there is no such thing as the Pacific market. The proposed cables might all be located in the Pacific Ocean, but they

are addressing different markets. As a simple example, the Trans Pacific Express (TPE) cable specifically services the ex-China market. With the China – US cable network full, the rapidly

Path diversity can be achieved by running traffic on different wavelengths. This protects against the most common outage on submarine networks, which is caused by a failure of the Submarine Line Terminating Equipment or the Network Protection Equipment in the cable station. Typically, the duration of these outages is measured in hours.

Route diversity protects against the less common, but higher impact faults that affect multiple wavelengths, typically as a result of external aggression. The most vulnerable segments are terrestrial links, which are subject to the depredations of the backhoe among other hazards. Submarine segments can be impacted by ships dragging anchors, or fishing activities. And, of course, both terrestrial and submarine segments can be impacted by tectonic activity and consequent landslides. These outages may take days or weeks to repair, with submarine faults obviously the most time consuming. If we take the ex-Australia example, Southern Cross Cable Network experienced a submarine route failure in 2001 and AJC in 2007. In each case, the fault took out one of the network’s two routes (both Southern Cross and AJC are loop networks, offering two routes each).

Network diversity protects against commercial risks from having a single supplier.

With economies now so dependent on the internet, diversity can justify cable networks that might be questioned if we just considered reality based economics.

What about ownership structure?

In 2002 / 2003 virtually every privately owned cable network was forced into some form of bankruptcy protection. Every privately owned network in the world went through financial restructures.

Not many of the new cables systems we see in development today are privately owned. The club cable model rules. I think there are probably a few reasons for this, including:

growing capacity requirement in this market can only be practically addressed by utilising intra-Asia networks to access trans-Pacific links in Japan until TPE is delivered.

The rationale for the Asia America Gateway (AAG), from south-east Asia across the Pacific via Guam, is similar. Rapidly developing economies and large populations in the region are expected to drive capacity growth. Presently, this traffic also has to utilise intra-Asia networks to access trans-Pacific links.

We need to look closely at demand, and that means identifying the realities of specific and quite different

markets. Clearly, if there are many networks addressing the same market, that adds to the cost in the numerator of the reality based pricing equation, while at the same time the total demand does not increase. However, when we look at TPE and AAG, they are in fact addressing quite different markets: China and south-east Asia respectively. Further, those markets are not currently well served.

How does diversity fit in?

These days, I think about three different forms of diversity:

• Path diversity• Route diversity• Network diversity

25

• Carrier ownership underpins demand for the capacity

• Avoids having to raise project finance in a very difficult (and maybe still gun-shy) market

• Insulates the network from the otherwise harsh impacts of economic forces where it essentially offers only a single product

So what is the answer?

While I hate to be a cop-out, there is, unfortunately, no simple answer. One needs to examine each network proposal from a number of perspectives, including:

• economics of reality based pricing• requirements for diversity• ownership structure

in the context of each market.

From those perspectives, it does not seem to me that, in general, we are headed for a replay of the 2002 / 2003 disasters in the Pacific. Most projects are developed with a realistic assessment of likely demand growth, or are insulated from the raw economics by their ownership structure and are providing required diversity. In some cases, all three apply.

However, where none of these factors is in play, watch out for a rough ride!

Robin Russell has over thirty years experience in the telecommunications industry. For the last seven years he has been CEO of Australia Japan Cable (AJC), an economical and ultra reliable submarine fibre optic network enabling links between Asia or North America and Australia. He holds a Master of Commerce degree from the University of New South Wales.

26

Fiber has become an integral part of the world’s submarine cabling infrastructure over the last twenty years. These optical systems primarily support the international voice, data, and video networks of the world’s leading service providers, but there are numerous applications for optical connectivity that go far beyond the traditional undersea networks. Performance enhancements from fiber manufacturers, optical electronics manufacturers, and fiber cablers have enabled the market for undersea optical applications to grow beyond standard telecom usages.

These technology developments, coupled with cost reductions, have made optical fiber practical and beneficial for many undersea applications ranging from large private networks connecting offshore energy platforms, to remotely operated vehicles (ROVs) that can fit in a suitcase. The U.S. military has also been aggressive in the deployment of

Avoiding the “Bends”

by Specifying

the Correct Fiber

by Tom Davis and David Mazzarese

submarine fiber in command and control networks and surveillance systems, as well as in tactical weapons designs. Fiber’s small size, light weight, and high bandwidth characteristics are some of the driving factors in the growth of fiber in this market. Another major benefit of optical cables over copper-based cables is they eliminate concerns about Electromagnetic Interference (EMI) and Radio Frequency Interference (RFI).

This article addresses some of the current leading applications for fiber optic cables in various harsh undersea environments, along with key factors associated with fiber performance.

Demands on Undersea Fiber

As the title of this article implies, the performance of fiber is impacted by the amount of bending stress imposed on an undersea cable. This is not a great concern with traditional large transcontinental

undersea cabling networks, because they use very robust cables that are protected by multiple layers of armor, with cable diameters approaching two inches. Today, however, more cable is being deployed in coastal areas where the shallow waters increase the chance that a cable will be snagged or pinched by boat anchors or commercial fishing rigs. Many of these cables serve less traditional undersea applications that require smaller, lighter, and more flexible designs. Such designs could subject the fiber to more stress than usual from the cable being bent, twisted, or pulled in an excessive manner.

The consequences of these adverse cable conditions could eventually impact the performance of the fiber(s) within the cable by limiting the amount of light traveling through the fiber. The induced “macrobending” (too tight a bend radius) and “microbending” (pinching or squeezing the fiber) can increase the attenuation of the optical cable, resulting in a reduction of the optical power traveling down the cable. This in turn could cause the deterioration of the optical signal. Sensitivity to macrobending and microbending can limit the performance of an optical cable, especially in demanding applications.

Bending loss is measured by wrapping a fiber a certain number of times around a mandrel of a specified diameter. For example, a fiber can be tested to determine how much “bend induced” loss occurred after being wrapped around a 20 mm diameter mandrel. Performance must be measured over the entire operating wavelength range since higher wavelengths are more sensitive to bending loss. In high-speed transport systems where there are multiple channels (wavelengths) running in a single fiber, it is important that the fiber exhibit minimal bend loss at the highest wavelengths of operation.

27

With the older OC-48/2.5 Gigabit per second (Gb/s) systems, there was a greater tolerance of fluctuations in optical power. With the introduction of 10 and 40 Gb/s systems, fiber performance becomes much more critical. This has placed much higher demand on the bend performance of the optical fibers deployed.

The ability of an optical cable to continue to perform well after being exposed to extreme operating conditions can broaden the range of applications for optical fiber. Furthermore, fiber performance in these demanding environments can be greatly improved by using a new “bend-optimized fiber” like OFS’ AllWave® FLEX single-mode fiber. AllWave FLEX fiber is fully compliant with existing single-mode specifications, has excellent splice performance, ultra-low PMD and outstanding long-term reliability, all with much improved bend performance. This type of fiber is an excellent choice for (or addition to) an optical network in a harsh environment.

The following are a few of the key parameters where a bend-optimized fiber will provide major operational improvements for attenuation/loss (when compared to industry standard single-mode fibers):

• Crush – How stable is the performance of the optical fibers within a cable that has been crushed for a period of time?

• Bend – How small of a circular wrap (diameter) can be made with a cable before the fiber starts to lose power?

• Low Temperature – How cold of an environment can you expose the cable to (for an extended period of time) before the loss of optical power starts to increase?

• Tensile – How stable is the performance of the optical fiber(s) when a load is being applied to the cable?

There are numerous other tests that are conducted on optical cables, but the ones identified above highlight some of the more critical.

Cable Requirements and Cost Considerations

For this report the term “cable” refers to any jacketing material used to cover and protect the optical fiber. The designs can run from a thin jacket of 600 micron PVC or nylon, to larger, more robust cables with armored layers. There are small sensor applications currently being deployed where fibers with no jacketing material are utilized in “short term” testing scenarios, with the entire package being disposable. Other undersea systems being deployed are far from disposable and need to operate for 25 years.

One of the differences between these specialized applications and a standard undersea deployment (transoceanic submarine cable laid on/under the ocean floor) is that the cables used in these special applications are subject to some level of movement in their environment. The motion induced on a cable may be as subtle as the movement of an offshore energy platform or as extreme as a tether controlling a short-range surveillance/weapons system. “High-speed” not only refers to the data transmission rates of the optical cables, but also the speed of the actual remote device being controlled by the fiber(s). As with many materials used in the engineering of these systems, some problems will be experienced if the cable is exposed to enough bending, crushing, pulling, or temperature extremes. The cable or tether is an area of vulnerability that cab be overcome by using new bend-optimized fibers.

In addition to the operational side of the system, there are costs associated with the various components within the system. The optical fiber impacts the cost of a cable; in fact, it is the primary cost component in many of the designs. Using standard transmission fibers in lieu of expensive specialty offerings is critical if these projects are to be competitive and meet very aggressive cost targets. Based on the large numbers being projected for actual deployment, it is clear that some of the current military systems would not be financially feasible without the availability of a mass produced bend-optimized “transmission” fiber such as AllWave FLEX fiber.

The strong price performance of these new fibers will help accelerate the migration of systems away from copper-based transmission methods. Valid concerns over the impact of EMI and RFI on copper-based technologies are also driving the migration to optical fiber. As mentioned, the inherent benefits of fiber over copper include its lighter weight, smaller size, higher bandwidth, and immunity to EMI/RFI. And with the availability of inexpensive, bend-insensitive fibers like AllWave FLEX fiber, the use of fiber optics becomes an excellent choice in far more applications than ever before.

29

University of Washington

REQUEST FOR

QUALIFICATIONS

FOR

Submarine Cable

System Design-Build

for

Regional Scale Nodes –

Primary Infrastructure

Project Ocean

Observatories Initiative

Project No. 1050108

Submittal Deadline Date:

June 2, 2008

The University of Washington is

soliciting Statements of Qualifications

(SOQ) from qualified firms or joint

ventures to provide design-build

services for the design and construction

of a new ocean observing system,

consisting of fiber optic submarine

cable and undersea nodes off the coast

of Oregon.

Obtaining the RFQ: A copy of the

RFQ with additional information about

the project and the selection process

may be obtained at the following

website address:

http://www.cpo.washington.edu, by

clicking the “Business” link and then

selecting the “Construction Business

Opportunities” link. Any addenda

issued for the RFQ will be published at

the same website address.

Submittal Deadline: One unbound

original and six copies of the information

requested in the RFQ must be received

at the University Facilities Building no

later than 3:00 p.m. on June 2, 2008.

MWBE: The University strongly

encourages MBEs and WBEs certified

by the State OMWBE to respond to

this RFQ. Voluntary goals of 10% for

MBEs and 6% for WBEs have been PR

ESS

REL

EASE

established for this project.

Questions: All questions regarding

this RFQ should be addressed to Peter

Barletto, Director Regional Scale

Nodes, at (206) 221-6883, or by e-mail

at barletto@u.washington.edu.

MICHAEL E. PURDY

Contracts Manager

Publication date(s) in the Seattle Daily Journal of Commerce: May 1, 2008

30

Reaching out to the

Multi-billion dollar

Subsea Telecoms MarketInternational experts convene in Singapore to tackle challenges of reaching out to new market segments, expanding brand recognition and unlocking new revenues through submarine networks in Asia and beyond

As bandwidth hunger hits a global high this year, telecom operators, cable owners and their suppliers have joined in the race to build, build and build more submarine cables to cater to the increasing global capacity demand. Be it in Africa, Asia Pacific, Europe or USA, more than 200,000 km of route of submarine cables will be built in the next 3 years. Around Africa itself, eight new international submarine fibre projects are planned and expected to go online in 2008 and 2009.

Submarine Networks World, Asia Pacific’s most established subsea infrastructure conference is back, from 18-20 August 2008 in Singapore! Serving as a meeting point for senior level telecom professionals and regulators to discuss the critical issues and developments related to underseatelecoms, this strategic event will attract CXO level executives who wish to explore the opportunities in Asia and beyond.

This year, we embark on an ‘amazing race, submarine cables edition’, around the world to bring to you a showcase of the latest short haul and long haul cable projects that are currently being built or commissioned to be built soon. 2008 highlights include cable projects update

from Perth to Singapore, Tahiti-Hawaii, Singapore to Japan, Indonesia to Singapore, DANICE, Sydney to Guam, Europe to Japan, China via Russia and American Samoa and more!

The summit will address the question of whether there really is a compelling story for adding capacity onto the already congested Asia-US routes, whether these new cable systems willeffectively add capacity on these routes; how owners and operators can unlock new revenue streams and increase profitability through these routes. With the potential of the lucrative multibillion dollar global subsea telecoms market, Submarine Networks World promises to be one of the best attended conferences of 2008 for telecoms experts and professionals in the region.

New for 2008 is the theme on ‘oil and gas applications of submarine cable networks’, where attendees will have the unique opportunity to learn how submarine cables can be designed to suit the needs of the oil and gas industry, first hand from the user’s perspective. And true to Terrapinn’s belief in providing a platform for learning, interacting and networking, the 2008 format includes interactive and fun polling sessions, roundtable discussions, expert panel sessions where participants can express their views on industry issues like ‘Where is the submarine cable industry heading in the next 3 years?’, ‘satellite operations vs. submarine cables vs. terrestrial networks’, ‘Examining current global capacity demand drivers and issues; Building a world class network infrastructure; Cable resilience, and reliability and routing issues.’

The line up of speakers for this year’s event include key figures in the telecommunications P

RES

S R

ELEA

SE

arena - Mr. Andrew Haire, Deputy Director Telecom, Infocomm Development Authority of Singapore, Byron Clatterbuck, Vice President Business Development and Carrier Strategy, Tata Communications Limited, Robin Russell, Chief Executive Officer, Australia Japan Cable, Seth R Davis, Senior Vice President, Pacific Crossing Limited, USA, Kittipong Tameyapradit, Senior Vice President and Acting President, TOT Public Company Limited and Assoc Prof. Sudharma Yoonaidharma, Commissioner, National TelecommunicationsCommision Thailand amongst others.

As always, it’s not just about the insights and ideas to be gained but also the networking andpartnership potential that this regional platform offers. This high profile gathering will highlight how the global submarine landscape is changing and paint a future vision of subsea telecommunications in the Asia Pacific region.

Asia remains one of the most important frontiers for global connectivity, and with high broadband penetration rates, managing bandwidth demand and capacity becomes all the more important. “These are dynamic times,” shares Ms Patricia Cheong, General Manager at Terrapinn Singapore, “With our long standing experience and market leadership serving the industry; Submarine Networks World has been the platform for the last 11 years for thought-leadership, professional education and relationship building. We are proud to be a part of this dynamic sector and thank our sponsors, speakers and advisers for their unfailing support.”

For more information about Submarine Networks World 2008, please visithttp://www.terrapinn.com/2008/snw/.

Subnet_10x8.5Submarinetelecom 4/17/08 6:32 PM Page 1

Composite

C M Y CM MY CY CMY K

Intelligent Infrastructure

18 - 20 August 2008, Marina Mandarin Hotel, Singapore

Organised by:

11th annual

World 2008

Don’t miss it!Pre-Conference

Masterclass

Oil and gasapplications of

submarine cables18 August 2008, Tuesday

Our sponsors

Call today on +65 6322 2770 to register!www.terrapinn.com/2008/snw

Sunmarine Network World 2008 FAX (+65) 6226 3264� I am interested in attending the conference.� I am interested in sponsorship/exhibiting at the event.� Please send me the conference brochure

Name: _________________________________________________________________________________ Designation: ________________________________________________________________

Organisation: _______________________________________________________________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________________________________________________________________

Tel: _____________________________________ Fax: ____________________________________ E-mail: __________________________________________________________________________

Media Partner:

C.B.R. PereraChief Global OfficerSri Lanka Telecom

Mohamed MaumoonHead, International &Regional DevelopmentDhiraagu Maldives

Zvika CaspyVice President, Sales &MarketingMedNautilus, UK

Daniel MoffatChief Executive OfficerGTA Teleguam, Guam

Gudmundur GunnarssonManaging Director/CEOFarice, Iceland

Robin RussellChief Executive OfficerAustralia Japan Cable,Bermuda

Kittipong TameyapraditSenior Vice President andActing PresidentTOT Public Company,Thailand

Brett O’RileyChief Executive OfficerOchre Services, Australia

Associate ProfessorSudharma YoonaidharmaCommissionerNationalTelecommunicationsCommission, Thailand

Andrew KwokVice President InternationalBusinessHutchison GlobalCommunications,Hong Kong

Marvic MolinaHead, InternationalBusinessBayanTelecommunications,Philippines

Bevan SlatteryChief Executive OfficerPIPE Networks, Australia

Henry Au-YeungVice PresidentInternational Products& SolutionsPCCW Global,Hong Kong

Seth R DavisSenior Vice PresidentPacific Crossing, USA

Separately

bookable

32

China is the world’s largest telecom market. As of the end of 2007, China had 365.448 million fixed-line telephone subscribers, including 84.544 million personal handy-phone system (PHS) subscribers. China was home to 547.286 million mobile subscribers as of the end of 2007.

Fixed-line telephone services have been increasingly substituted by mobile services in China. While China added 86.228 million mobile subscribers in 2007, the country lost 2.337 million fixed-line telephone subscribers.

China Mobile, China Unicom, China Telecom and China Netcom are the four main telecom operators in China.

In 2007, the Hong Kong-listed arms of the four operators recorded combined revenues of RMB 719.159 billion ($102.88 billion) and combined net profit of RMB 132.159 billion ($18.91 billion). China Mobile, the largest mobile operator in China, recorded the largest amount of revenues and net profit of the four.

China Mobile’s revenues rose 20.9 percent to RMB 356.959 billion ($51.07 billion) in 2007, accounting

Chin

ese Telecom Operators 2007

Perfo

rmance Review

By Iris Hong

for almost half of the combined total revenues of the four companies. Its net profit was up 31.9 percent to RMB 87.062 billion ($12.46 billion), which accounted for 65.9 percent of the combined total net profit of the four.

Chinese telecom operators’ financial results 2007 side by side

Indicator

Revenues 2007

(bln, RMB)

Year-on-year Increase

(%)

Profit Attributable

to Shareholders

2007

(bln, RMB)

Year-on-year Increase

(%)

Margin of Profit

Attributable to

Shareholders

Earnings Per

Share 2007

China Mobile (HK)

356.959 20.9% 87.062 31.9% 24.4% 4.35

China Telecom

(HK)178.656 1.7% 23.702 -13.0% 13.3% 0.29

China Unicom

(HK)99.539 4.4% 9.30 144.7% 9.3% 0.713

China Netcom

(HK)84.005 -0.2% 12.095 -6.7% 14.4% 1.81

Total 719.159 -- 132.159 -- --

Source: The companies’ annual reports 2007 and Interfax analysis

33

Revenue distribution of four main Chinese telecom operators 2006 and 2007

Source: The companies’ annual reports 2006 and 2007, and Interfax analysis0

Net profit distribution of four main Chinese telecom operators 2006 and 2007

Source: The companies’ annual reports 2006 and 2007, and Interfax analysis

China Mobile (HK)

45.4%

China Telecom (HK)

27.0%

China Unicom (HK)

14.7%

China Netcom (HK)

12.9%

China Mobile (HK)

49.6%

China Telecom (HK)

24.8%

China Unicom (HK)

13.8%

China Netcom (HK)

11.7%

China Mobile (HK)

60.0%

China Telecom (HK)

24.8%

China Unicom (HK)3.5%

China Netcom (HK)

11.8%

China Mobile (HK)

65.9%

China Telecom (HK)

17.9%

China Unicom (HK)7.0%

China Netcom (HK)

9.2%

China Mobile vs. China Unicom

In 2007, the Chinese government did not issue the much-anticipated 3G licenses. China Mobile and China Unicom are the only two mobile operators in China. China Mobile operates a GSM network. China Unicom operates a GSM network and a CDMA network. China Unicom also has some fixed-line business such as Internet and long distance

services. Both China Mobile and China Unicom have nationwide operation.

In terms of total assets as of the end of 2007, China Mobile was worth over three times more than China Unicom. In 2007, China Mobile’s revenues were more than three times higher than those of China Unicom. Its net profit was over nine times that of China Unicom’s net profit in 2007.

China Unicom’s profit attributable to shareholders rose 144.7 percent year-on-year in 2007. Excluding the loss on changes in fair value of derivative component of convertible bonds and gains from tax refunds on reinvestment in a subsidiary, China Unicom recorded an adjusted net profit of RMB 7.09 billion ($1.01 billion) in 2007, up 14.4 percent year-on-year.

34

Chinese mobile operators’ financial results 2007 side by side

Indicator

Revenues 2007

(bln, RMB)

Year-on-year Increase

(%)

Profit Attributable

to Shareholders

2007

(bln, RMB)

Year-on-year Increase

(%)

Earnings Per

Share 2007

China Mobile (HK)

356.959 20.9% 87.062 31.9% 4.35

China Unicom (HK)

99.539 4.4% 9.3 144.7% 0.713

China Unicom (HK) - *adjusted

99.539 4.4% 7.09 14.4% 0.544

Source: the companies’ annual reports 2007 and Interfax analysis

* Excluding the realized loss of RMB 0.57 billion ($81.5 million) on changes in fair value of derivative component

of convertible bonds and other gains from tax refund of RMB 2.78 billion ($397.7 million) on reinvestment in a subsidiary

invested in its GSM network infrastructure. Its estimated C A P E X for 2008 is approximately RMB 30.95 billion ($4.4 billion), up 20.3 percent year-on-year. The company will spend approximately RMB 18.7 billion ($2.68 billion) to improve the quality of its GSM network

coverage and the infrastructure for its value-added business platform in 2008.

As can be seen from the figures, China Mobile’s investment in 2008 will be about four times that of China Unicom’s. In the hope of launching 3G services, both mobile operators are increasing their CAPEX for 2008.

Breakdown of mobile subscribers in China by operator

Source: The companies’ annual reports 2007 and Interfax analysis

In terms of subscribers, China Mobile has more than twice as many as China Unicom. China Mobile's average revenue per user (ARPU) per month in 2007 was much higher than that of China Unicom, which explained why its revenues were more than three times of that of China Unicom.

While China Mobile’s ARPU remained stable in 2007, China Unicom’s ARPU from both GSM and CDMA services declined.

China Mobile was able to generate more revenues from each subscriber because it offers a wider variety of mobile value-added services (MVAS). Its MVAS revenue in 2007 was RMB 91.609 billion ($13.1 billion), accounting for 25.7 percent of its total revenues. China Unicom’s MVAS revenue in 2007 was only RMB 19.941 billion ($2.85 billion), accounting for 20 percent of its total revenues.

China Mobile’s capital expenditure (CAPEX) for 2007 was RMB 105.1 billion ($15 billion), up 20.8 percent compared with 2006. Its CAPEX budget for 2008 is RMB 127.2 billion ($18.2 billion), which will be an increase of 21 percent compared with 2007.

China Unicom’s CAPEX for 2007 totaled RMB 25.72 billion ($3.68 billion), which was mainly

Chinese mobile operators’ operational data 2007 side by side

Indicator

Total Subscribers

2007

(mln)

Year-on-year Increase

(%)

MOU

(bln)

Year-on-year Increase

(%)

ARPU

(RMB)

Year-on-year Increase

(%)

China Mobile (HK)

369.339 22.6% 455 19.4% 89 -1.1%

China Uni-com (HK)

162.491 14.1% -- -- -- --

GSM 120.564 13.9% 250.1 5.4% 46 -6.5%

CDMA 41.927 14.9% 263 -4.3% 58.1 -11.8%

Source: The companies’ annual reports 2007 and Interfax analysis

Total Subscribers 2007 (mln)

China Mobile(HK), 369.339,

69.4%

China Unicom(HK), 162.491,

30.6%

China Telecom vs. China Netcom

China Telecom and China Netcom are the largest two fixed-line operators in China. Their smaller rivals China TieTong and China Satcom also offer some long distance voice services, but are must smaller in scale. China TieTong specializes in railway communications while China Satcom specializes in satellite communications. China TieTong and China Satcom are not listed companies, therefore their performance is not discussed here.

China Netcom mainly operates in ten northern Chinese provinces, while China Telecom mainly operates in 21 southern mainland Chinese provinces. They have some small operations in each other’s service regions.

In terms of total assets and revenues, China Telecom is about twice as large as China Netcom. It also has about twice as large a subscriber base as China Netcom.

35

Challenged by mobile substitution, both China Telecom and China Netcom recorded a profit slide in 2007. The decrease was also due to the inclusion of the amortization of upfront connection fees. The two carriers used to charge activation fees for fixed-line services to the subscribers, and stopped doing this a few years ago. The fees collected in the past were amortized over a period of expected customer relationship. The amortized amount decreases each year until the period expires. China Telecom, which stopped charging this fee in July 2001, amortize it for 10 years.

If excluding the amortization of upfront connection fees, both carriers recorded a slight increase in net profit in 2007. China Telecom’s growth of revenue and net profit was faster than that of China Netcom.

China Telecom (HK)’s and China Netcom (HK)’s financial results 2007 side by side

Indicator

Revenues 2007

(bln, RMB)

Year-on-year Increase

(%)

Net Profit 2007

(bln, RMB)

Year-on-year Increase

(%)

Earnings Per

Share 2007

China Tele-com (HK)

178.656 1.7% 23.702 -13.0% 0.29

China Tele-com (HK) - *adjusted

175.362 2.8% 22.517 1.1% 0.28

China Netcom (HK)

84.005 -0.2% 12.095 -6.7% 1.81

China Netcom (HK) - *ad-justed

82.488 0.9% 10.578 0.3% N/A

Source: The companies’ annual reports 2007 and Interfax analysis

*Excluding amortization of upfront connection fees

As of the end of 2007, China Telecom had 220 million local telephone subscribers, a net decrease of 2.71 million from the end of 2006, or down by 1.2 percent. Its broadband subscribers reached 35.65 million, a net increase of 7.33 million, up by 25.9 percent year-on-year.

China Telecom’s revenue from local telephone services decreased by 9.8 percent from 2006 to RMB 70.424 billion ($10.07 billion) in 2007, accounting for 39.4 percent of its total revenues. The major reason for the decline was the declining tariff for mobile telephone services has caused subscribers to migrate from fixed-line to mobile services.

China Netcom’s broadband subscribers reached 19.768 million, representing a year-on-year increase of 37 percent. Its local telephone subscribers totaled 110.82 million, which was a 3.6 percent year-on-year decrease.

China Telecom’s voice ARPU dropped 10.1 percent to RMB 41.8 ($5.98) in 2007, while China Netcom’s voice ARPU dropped 9.6 percent to RMB 36.6 ($5.2). Both of them attributed the decline in ARPUs to the rapid decline of mobile voice tariffs, which dropped 17.7 percent year-on-year.

China Telecom (HK)’s and China Netcom (HK)’s operational data 2007 side by side

Indicator

Fixed-line Telephone

Subscribers 2007

(including PHS

Subscribers) (mln)

Year-on-year Change

(%)

PHS Subscribers 2007 (mln)

Year-on-year Change

(%)

Broadband Subscribers

2007

(mln)

Year-on-year Change

(%)

China Telecom (HK)

220.33 -1.2% 58.04 -7.5% 35.65 25.9%

China Net-com (HK)

110.82 -2.8% 26.189 -4.1% 19.768 37%

Source: The companies’ annual reports 2007 and Interfax analysis

36

Breakdown of fixed-line telephone subscribersin China by operator

Local Telephone Subscribers 2007 (including PHSSubscribers) (mln)

China Telecom(HK), 220.33,

60.3%

China Netcom(HK), 110.82,

30.3%

Others, 34.298,9.4%

Source: The companies’ annual reports 2007, Ministry of Information Industry and Interfax analysis

Breakdown of PHS subscribers in China by operator

PHS Subscribers 2007 (mln)

China Netcom(HK), 26.189,

31%

China Telecom(HK), 58.04,

69%

Source: The companies’ annual reports 2007, Ministry of Information Industry and Interfax analysis

Breakdown of broadband subscribers in China by operator

Broadband Subscribers 2007 (mln)

China Netcom(HK), 19.768,

29.7%

Others, 11.046,16.6%

China Telecom(HK), 35.65,

53.6%

Source: The companies’ annual reports 2007, Ministry of Information Industry and Interfax analysis

Because of limited growth, both operators have been prudent with capital expenditure for the past few years. They have been reducing CAPEX and optimizing their business structures to enhance returns.

In 2007, China Telecom’s CAPEX decreased by 7.2 percent from 2006 to RMB 45.558 billion ($6.52 billion). Its estimated CAPEX for 2008 is RMB 45 billion ($6.44 billion).

In 2007, China Netcom invested more in high-growth services such as broadband access and content, and slowed down its CAPEX for traditional fixed-line services including PHS (Personal Handy-phone System) related operations. In 2007, China Netcom’s CAPEX decreased by 15.8 percent year-on-year to RMB 20.684 billion ($2.96 billion). Its CAPEX guidance for 2008 is RMB 19.6 billion ($2.8 billion).

Both China Telecom and China Netcom have reduced their investment in PHS, in the hope of receiving 3G licenses. PHS is a limited mobility wireless technology, which the two adopted years ago to rival the services provided by mobile operators.

Regional telecom service development review

According to China’s Ministry of Information Industry, China recorded total telecom service turnover of RMB 1.854 trillion ($264.86 billion) and telecom service revenues of RMB 728.01 billion ($104 billion) in 2007. Total telecom fixed asset investment reached RMB 227.99 billion ($32.61 billion).

Guangdong Province ranked first in terms of telecom service turnover and revenues in 2007. Zhejiang, Jiangsu and Shandong provinces are also large regional markets in terms of telecom service turnover and revenues.

Top ten provinces in terms of telecom service turnover and revenues, and telecom fixed assets investment 2007

Ranking Provinces

Total Telecom Service

Turnover 2007 (RMB in blns)

Provinces

Total Telecom Service

Revenues 2007 (RMB in blns)

Provinces

Total Investment in Telecom Fixed

Assets 2007 (RMB in blns)

1 Guangdong 298.76 Guangdong 109.79 Guangdong 23.89

2 Zhejiang 128.02 Jiangsu 53.83 Jiangsu 15.06

3 Jiangsu 121.12 Zhejiang 52.05 Zhejiang 14.73

4 Shandong 116.67 Shandong 43.8 Shandong 11.62

5 Henan 88.52 Shanghai 36.81 Shanghai 11.07

6 Hebei 81.06 Beijing 35.82 Beijing 10.73

7 Fujian 75.67 Hebei 31.14 Liaoning 8.64

8 Sichuan 71.78 Liaoning 30.47 Sichuan 8.35

9 Liaoning 66.99 Henan 30.32 Hebei 8.33

10 Shanghai 66.12 Sichuan 29.03 Fujian 8.31

Source: Ministry of Information Industry and Interfax analysis

37

Guangdong Province has the most fixed-line telephone and mobile subscribers among all provinces, municipalities and autonomous regions in China. Beijing has the highest fixed-line telephone penetration rate of 57.8 percent and the highest mobile phone penetration rate of 101.1 percent. Shanghai has the second highest fixed-line telephone penetration rate as well as the second highest mobile phone penetration rate.

Top ten provinces in terms of fixed-line telephone subscribers and penetration rate 2007

Ranking Provinces

Fixed-line Telephone

Subscribers 2007 (mln)

Provinces

Fixed-line Telephone

Penetration Rate 2007 (%)

1 Guangdong 37.431 Beijing 57.8

2 Jiangsu 32.258 Shanghai 56.3

3 Shandong 24.939 Zhejiang 48.5

4 Zhejiang 24.171 Jiangsu 42.7

5 Henan 18.546 Fujian 41.7

6 Sichuan 17.38 Guangdong 40.2

7 Liaoning 16.671 Liaoning 39

8 Hebei 15.267 Tianjin 37

9 Anhui 14.943 Xinjiang 33

10 Fujian 14.825 Hainan 28.7

Source: Ministry of Information Industry and Interfax analysis

Top ten provinces in terms of mobile subscribers and penetration rate 2007

Ranking ProvincesMobile

Subscribers 2007 (mln)

ProvincesMobile Phone Penetration

Rate 2007 (%)

1 Guangdong 78.421 Beijing 101.1

2 Shandong 37.381 Shanghai 97.9

3 Zhejiang 35.282 Guangdong 84.3

4 Jiangsu 33.132 Zhejiang 70.8

5 Henan 29.145 Tianjin 68.7

6 Hebei 28.148 Fujian 50.8

7 Sichuan 24.004 Jilin 48.1

8 Liaoning 19.589 Liaoning 45.9

9 Hubei 19.406 Ningxia 44.7

10 Fujian 18.087 Jiangsu 43.9

Source: Ministry of Information Industry and Interfax analysis

Appendix I: Breakdown of telecom service turnover and revenues, and telecom fixed assets investment 2007 by province

Total Telecom Service Turnover

2007 (RMB in blns)

Total Telecom Service Revenues 2007 (RMB in blns)

Total Investment in Telecom Fixed Assets

2007 (RMB in blns)

Beijing 62.95 35.82 10.73

Tianjin 28.38 10.38 3.02

Liaoning 66.99 30.47 8.64

Shanghai 66.12 36.81 11.07

Jiangsu 121.12 53.83 15.06

Zhejiang 128.02 52.05 14.73

Fujian 75.67 27.18 8.31

Shandong 116.67 43.80 11.62

Guangdong 298.76 109.79 23.89

Hainan 11.92 4.60 1.54

Hebei 81.06 31.14 8.33

Shanxi 41.06 17.56 5.15

Jilin 39.29 12.34 3.68

Heilongjiang 48.10 17.22 5.21

Anhui 41.95 18.95 6.26

Jiangxi 38.42 13.95 5.13

Henan 88.52 30.32 8.06

Hubei 55.02 22.68 7.79

Hunan 60.34 22.91 7.11

Inner Mongolia 35.32 11.36 4.86

Guangxi 46.47 16.29 4.92

Chongqing 35.06 11.96 4.12

Sichuan 71.78 29.03 8.35

Guizhou 28.25 10.20 3.67

Yunnan 45.68 15.20 5.29

Tibet 2.86 1.55 0.87

Shaanxi 50.56 16.14 6.26

Gansu 21.09 7.83 3.10

Qinghai 5.22 2.30 1.03

Ningxia 7.71 2.76 1.00

Xinjiang 29.35 10.27 4.11

Units affiliated to central government

4.84 1.35 15.08

Total 1,854.54 728.01 227.99

Source: Ministry of Information Industry

38

Appendix II: Breakdown of fixed-line and mobile subscribers by province 2007Penetration rates of fixed-line and mobile services by province 2007

Fixed-line Telephone Subscribers 2007 (mln)

Fixed-line Telephone Penetration Rate 2007 (%) Mobile Subscribers 2007 (mln) Mobile Phone Penetration Rate 2007 (%)

Beijing 9.146 57.8 15.983 101.1

Tianjin 3.980 37 7.383 68.7

Liaoning 16.671 39 19.589 45.9

Shanghai 10.211 56.3 17.765 97.9

Jiangsu 32.258 42.7 33.132 43.9

Zhejiang 24.171 48.5 35.282 70.8

Fujian 14.825 41.7 18.087 50.8

Shandong 24.939 26.8 37.381 40.2

Guangdong 37.431 40.2 78.421 84.3

Hainan 2.399 28.7 3.238 38.7

Hebei 15.267 22.1 28.148 40.8

Shanxi 8.231 24.4 14.204 42.1

Jilin 7.298 26.8 13.111 48.1

Heilongjiang 10.812 28.3 14.492 37.9

Anhui 14.943 24.5 14.100 23.1

Jiangxi 8.848 20.4 11.824 27.3

Henan 18.546 19.7 29.145 31

Hubei 12.789 22.5 19.406 34.1

Hunan 13.212 20.8 17.980 28.4

Inner Mongolia 5.032 21 10.469 43.7

Guangxi 8.921 18.9 13.843 29.3

Chongqing 7.231 25.8 11.769 41.9

Sichuan 17.380 21.3 24.004 29.4

Guizhou 5.200 13.8 8.340 22.2

Yunnan 6.272 14 13.464 30

Tibet 0.689 24.5 0.737 26.2

Shaanxi 9.263 24.8 16.127 43.2

Gansu 5.853 22.5 6.864 26.3

Qinghai 1.232 22.5 2.217 40.5

Ningxia 1.402 23.2 2.698 44.7

Xinjiang 6.774 33 8.083 39.4

Units affiliated to central government

4.225 　 - 　

Total 365.449 27.8 547.286 41.6

Source: Ministry of Information Industry

39

Appendix III: Main indicators of telecom capacity 2007

Optical Cable Length (mln kilometers) Capacity of Central Office Switches (mln) Capacity of Mobile Phone Exchanges

Beijing 0.063 15.542 23.98

Tianjin 0.032 6.083 10.65

Liaoning 0.188 19.959 27.27

Shanghai 0.064 14.546 26.26

Jiangsu 0.362 47.184 52.449

Zhejiang 0.331 32.465 59.031

Fujian 0.183 19.648 37.21

Shandong 0.302 32.702 76.14

Guangdong 0.411 53.625 113.658

Hainan 0.032 3.027 4.78

Hebei 0.228 21.322 39.525

Shanxi 0.254 12.393 18.674

Jilin 0.106 11.099 19.449

Heilongjiang 0.181 15.379 22.569

Anhui 0.202 18.374 20.264

Jiangxi 0.223 12.05 19.332

Henan 0.251 24.348 40.848

Hubei 0.205 17.481 32.134

Hunan 0.192 17.623 24.867

Inner Mongolia 0.106 7.228 20.13

Guangxi 0.19 13.617 19.792

Chongqing 0.116 11.499 18.443

Sichuan 0.266 24.535 34.524

Guizhou 0.137 8.268 14.425

Yunnan 0.199 9.866 23.145

Tibet 0.021 1.226 1.1

Shaanxi 0.181 13.87 23.523

Gansu 0.116 8.144 10.968

Qinghai 0.039 1.663 2.57

Ningxia 0.024 2.247 3.546

Xinjiang 0.131 9.028 11.908

Units affiliated to central government

0.105 5.119 0

Total 5.441 511.163 853.163

Source: Ministry of Information Industry

China Telecommunication Weekly is published by Interfax China Ltd. Contact - David Harman david.harman@interfax-news.com

40

Abstract

Different design priorities and requirements have evolved for undersea cable systems serving offshore production platforms which vary significantly from the requirements of traditional telecommunication cable systems. High survivability and platform independence, particularly in geographic areas subject to severe weather events, are critical and may outweigh pure cost considerations. Sharing a single cable system among the platforms of multiple operators requires additional technical, operational and political considerations.

This paper identifies key operational parameters, presents a set of design criteria specific to the offshore oil and gas industry, considers the tradeoffs

of various system architectures and discusses physical design and implementation challenges.

Introduction

The expansion of deep water offshore oil and gas production coupled with new, collaborative methods of operating these platforms requiring large bandwidth with high reliability, high survivability and low latency are bringing submarine fiber optic cable systems to the forefront of offshore telecommunications. As oil companies are now considering and implementing the first of these cable systems they are finding that conventional thinking does not take into account some of their unique operating conditions, will not meet their operational needs, and will not yield the financial

returns and operational security they have targeted that these new systems should provide.

Conventional Thinking

In the oil and gas industry, conventional thinking is that telecommunication systems are a necessary evil and, that as telecoms do not bring oil or gas out of the ground, these costs should be kept as low as possible. In the telecom industry, however, conventional thinking is that reliability is king and ring systems enhance reliability; that single catastrophic failures are rare, but real and multiple catastrophic failures are highly unlikely; that cost is an important issue and undersea repeaters are expensive.

In the Gulf of Mexico and other densely explored shelf regions, offshore platforms are numerous and close enough to each other that a ring of comprised of unrepeatered submarine cable links is technically feasible to connect a number of platforms (possibly from several different operators) without any submerged repeaters. This configuration of links would seem to meet the reliability requirements using a ring architecture and should have the lowest implementation cost. In the oil and gas industry where almost every major asset has multiple operators as investors with a single nominated asset operator, this model, employing a shared asset amongst the platforms of multiple operators would seem to meet the gross business requirements as well.

Design Challenges

In areas like the Gulf of Mexico frequented with hurricanes, severe weather operating procedures present significant design and operational challenges. With platform abandonment during

Design Challenges ForUndersea Systems Serving

Offshore Production Platforms

By Guy W. Arnos

41

severe weather forcing production to be closed in, one of the goals of submarine telecom systems to offshore platforms is to improve the ability of the operators to re-man the platforms quickly following abandonment. With the new generation of deep-water platforms, a single platform may be producing as much as 250,000 barrels of oil per day. With the current price of oil, being able to bring one platform back into production a day earlier means a significant reduction in lost revenue to the operator and owners. If adequate telemetry can be maintained through a survivable transmission link to a shore base, it would be possible to determine the status of the platform either as secure and habitable or as uninhabitable, and with information regarding the nature of the deficiencies and problems aboard. In either case, good and survivable telemetry would make it possible to re-man the platform or carry out repairs in a shorter time frame and reduce the time to resumption of production by eliminating time-consuming flyovers and exploratory crews.

During abandonment, every operator and, in fact, every platform (even platforms under the same operator) has different storm power generation standards, procedures and fuel reserves in the day tanks of its generators.

In an unrepeatered ring system of 8, 10, 12 or more platforms, the failure of two nodes can cause loss of communications to multiple nodes in the ring. Many different scenarios may cause the failure of a node during a hurricane. The failure of storm power systems and the loss of entire platforms both occurred during hurricanes Katrina and Rita in 2005. In the telecom world, highly reliable power supported by battery backup with long reserve times is taken for granted. In the world of the offshore platform, topside real estate is scarce,

valuable and planned for years in advance. There simply is no room for a massive battery plant to provide 24 or 48 hours of reserve time.

Network security becomes another design challenge in an environment where the platforms of multiple operators are expected to coexist on a common shared ring system. In the case of the traditional unrepeatered ring, traffic from all operators will pass through each operator’s platform(s). Admittedly, all traffic may not drop to the electrical level and express traffic may pass through the node while local traffic is added and dropped, but this will be completely dependent on the type of terminal, add/drop multiplex, repeater or router equipment used in the network design. Only in the cases of the add/drop multiplex (which is much more common in traditional telecom architectures than in Ethernet architectures more suited to enterprise networks) or the repeater, will express traffic of one operator remain fully encapsulated as it transits another operator’s node.

Further design challenges are encountered when working in hurricane prone geographic areas. As an example, storms in the Gulf of Mexico may affect several hundred kilometers of coastline with high winds and storm surge as was clearly demonstrated by hurricane Katrina.

In deep-water production areas, new reservoirs are constantly being brought into production and it should be anticipated that several new production assets will be brought on line during the design life of the submarine cable system. While these assets will be in the same general geographic area, many of the new fields may lay hundreds of kilometers from existing production platforms. Any system installed today should allow for expansion,

both in the number of platform nodes and in the length of the overall system. This type of flexibility is exceedingly difficult to accommodate with a ring comprised of unrepeatered links.

Design Criteria

While reviewing the operational requirements and operating environment of the offshore oil and gas industry, a specific set of design criteria quickly surfaces as design imperatives:

• Shore terminal stations must be separated by 400 to 500 km as a minimum

• Each platform node must be completely independent of every other node

• The system must survive the loss of several nodes and one terminal station

• The system must accommodate expansion in the number of nodes and in total system length

• In a multi-operator environment, with rare exceptions, traffic from each node should bypass all other nodes, or it must remain encapsulated and secure if it transits another node.

Meeting the Design Criteria – A Comparison of System Architectures

In a traditional unrepeatered ring configuration, a single pair of fibers may be employed. The ring itself provides protection from individual equipment, fiber, or link failures. All traffic must pass through each node to be amplified and/or regenerated either through terminals, add/drop multiplexers (ADM), amplifiers or regenerators. Power failure at one node will affect traffic for all nodes. Power failure at

There simply is no room for a massive battery plant to provide 24 or 48 hours of reserve time.

42

two non-adjacent nodes isolates all nodes between them from the shore. Failure of one node and one terminal station will isolate all nodes between the failed node and the terminal station. Addition of new nodes will be dependent on the location of the new node relative to other nodes and be dependent on distance. This architecture fails to meet all of the stated design criteria except for the encapsulation and security of express traffic, which is dependent upon the type of transmission equipment used at the nodes.

To improve survivability, a modified unrepeatered ring configuration can be considered where each node is connected to both its adjacent nodes and the next nodes beyond. This configuration utilizes three fiber pairs in each link, except the links from each shore terminal station to the first offshore node at each end of the system which use two fiber pairs. This configuration also employs twice the number of optical transmitter/receiver pairs, less two, compared with the traditional ring. This architecture can survive a single shore terminal failure, up to three simultaneous node failures (depending on location) or up to two node failures and a shore terminal failure (depending on node locations) without affecting traffic from the other nodes. This architecture also significantly improves survivability, but only in certain failure scenarios. This configuration also comes with a hefty cost increase for the limited improvement in survivability and may be difficult to implement by having to span longer distances between non-adjacent platforms. In the Gulf of Mexico, some of these distances approach 300 km. While these distances are achievable without submerged repeaters, they require extremely high power amplifiers, special fiber types and specialized premium grade connectors to handle the high power levels. All

of these factors add significant costs and system complexity for small benefits in survivability.

A further configuration option is the use of a repeatered ring system. Current technology can support connections to as many as 32 nodes from one fiber pair utilizing broadband optical add/drop multiplexing (OADM) which can allow the dropping/inserting of one or more multiplexed wavelengths at each node without accessing pass-through traffic from other nodes. This repeatered OADM architecture provides exceptional survivability in the face of multiple node failures, as each node’s traffic is completely independent of every other node. Since the system is powered from the shore terminals, overall system survivability is completely independent of any individual platform’s powering procedures during abandonment. Each platform’s traffic is dependent only on its own power. The system can also sustain a single shore terminal station failure in addition to multiple node failures and maintain traffic to all other surviving nodes. Both transmission and powering can be sustained from a single shore terminal. By employing power switching branching units, repairs to, or expansion of, any part of the system may be accomplished without interruption of traffic to unaffected nodes.

The repeatered architecture adds power feeding and a more expensive cable structure as well as increased sparing costs to include repeaters and OADM branching units. While the cost of repeaters and power feeding equipment has been added, fewer fibers and transmitter/receiver pairs are used in the repeatered OADM ring compared with the modified unrepeatered ring. This reduction in fibers and transmission equipment largely offsets the added expense of repeaters, power feed and cable types, bringing the cost differential between

the repeatered and modified unrepeatered rings to 10% or less with major improvements in system reliability survivability. The cost differential between a repeatered OADM ring and a simple unrepeatered ring is in the range of 20-25%.

While significant expansion may be sustained on a single fiber pair, if future expansion beyond 32 nodes is anticipated, additional fiber pairs may be added to the system with limited initial capital investment. Terminal equipment and branching units may be added as platform nodes are brought into service. Proper initial transmission design can provide extensions to the length of the overall ring totaling several hundred kilometers in any geographic area of the ring.

Physical Design and Implementation Challenges

Aside from architectural and powering considerations, the physical design and implementation of submarine cable systems for offshore production platforms present further challenges. Traditional undersea systems in the telecom industry deal with branching units and shore ends on a regular basis and enjoy a priority for uninterrupted marine operations. For systems serving offshore production platforms, shore ending and branching unit operations are virtually the same as for traditional systems and suffer the same issues of weather limitations, environmental permits and pipeline crossings. However, when it comes to marine operations, the undersea approaches and riser systems serving the platforms, the engineering and the installation procedures become dramatically different from traditional telecom cable systems.

Proper initial transmission design can provide extensions to the length of the overall ring totaling several hundred kilometers in any geographic area of the ring.

43

When it comes to marine operations in proximity to production platforms, safety and production take priority over all other considerations. From a safety perspective, all operations within a kilometer of the platform will be under the control of the platform and, for any vessel to approach within 500 meters, the vessel must be capable of DP2 dynamic positioning. In telecom applications, daily ship operations costs are a huge expenditure. In the light of the dollar values involved in producing hundreds of thousand of barrels of oil daily, the daily ship rate pales in comparison and priority will not be given to the operations of the cable ship.

The seabed beneath an offshore production platform, and for a large circle around it, is a carefully planned and congested area of pipelines umbilicals and wellheads. Designing the cable approach through this undersea maze requires close coordination with the platform operator, often with several departments having discrete responsibilities, and requires access to information which the operator considers highly confidential.

For floating platforms requiring dynamic riser cables, the analysis of the riser design will require an extensive clashing study to evaluate the interaction of the cable riser with all of the other pipelines and umbilicals, considering all the potential motions of the platform within its circle of position and under all weather conditions. The analysis will also consider fatigue analysis of the riser design. These computer-simulated studies take considerable time and the companies performing the analyses have significant backlogs of work for all of the operators.

Design of the seabed appurtenances for each spur to a platform will have its own custom aspects having to do with riser tube availability, cable

anchors and mechanical fusible links in the cable spur.

Riser installation planning, coordination and execution are perhaps the most complex and challenging aspects of the entire project. The physical challenges of a safe and successful riser installation onto a deep water platform are daunting on their own. The process is further complicated by myriad review requirements for any operation or installation aboard an offshore production platform. All operators mandate strict Management of Change (MOC), Hazard Identification and engineering reviews. The cable installation operation will have to be coordinated with other important production-related projects in regard to marine operations in proximity to the platform and as to availability of limited billeting space for technicians aboard the platform.

All of these design and implementation challenges point to an important need to begin the design and coordination processes for platform related operations and installations as early in the project cycle as possible.

Conclusions

Several design criteria are critical to the operational requirements of submarine cable systems used for telecommunications for offshore oil and gas production platforms:

• Shore terminal stations must be separated by 400 to 500 km as a minimum

• Each platform node must be completely independent of every other node

• The system must survive the loss of several nodes and one terminal station

• The system must accommodate expansion in the number of nodes and in total system length

• In a multi-operator environment, with rare exceptions, traffic from each node should bypass all other nodes, or it must remain encapsulated and secure if it transits another node.

A repeatered OADM ring system employing power switching branching units can meet al the critical design criteria with the additional benefit that repairs and system expansions may be accomplished without interruption to existing traffic. Cost differentials to deploy repeatered solutions compared with unrepeatered ring systems range from 10% to 25% with exceptional survivability. That survivability can pay back the increased cost of deployment by the reduction of lost production by one day on one platform during one hurricane event.

The complexities and special requirements of operations concerning offshore production platforms require special engineering and coordination which is best begun as early in the project cycle as practicable.

All of these design and implementation challenges point to an important need to begin the design and coordination processes for platform related operations and installations as early in the project cycle as possible.

44

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A global guide to the latest known locations of the world’s cableships*, as of May 2008. Information Provided by Lloyds List.

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Acergy Discovery 4/15/2008 Velsen Netherlands

4/8/2008 4/8/2008 Algeciras Spain

4/8/2008 4/8/2008 Gibraltar Gibraltar

Agile 4/27/2008 4/28/2008 Dubai United Arab Emirates

3/28/2008 4/27/2008 Jebel Ali United Arab Emirates

5/2/2008 Ajman United Arab Emirates

Asean Restorer 4/21/2008 Singapore Republic of Singapore

3/22/2008 4/21/2008 Singapore Republic of Singapore

3/4/2008 3/16/2008 Singapore Republic of Singapore

Atlantic Guardian 3/30/2008 4/12/2008 Takoradi Ghana

4/12/2008 4/22/2008 Las Palmas Canary Islands

C.S.Sovereign 3/14/2008 3/14/2008 Brunsbuttel Germany

3/13/2008 3/13/2008 Korsor Denmark

3/16/2008 3/30/2008 Portland(GBR) United Kingdom

4/5/2008 4/5/2008 Dover Strait United Kingdom

3/15/2008 3/15/2008 Dover Strait United Kingdom

C/S Vega 4/19/2008 Singapore Republic of Singapore

Cable Innovator 4/5/2008 4/8/2008 Taichung Taiwan

3/13/2008 3/16/2008 Taichung Taiwan

4/15/2008 4/18/2008 Yokohama Japan

Cable Protector 4/21/2008 Singapore Republic of Singapore

3/6/2008 4/21/2008 Singapore Republic of Singapore

Cable Retriever 3/12/2008 3/24/2008 Subic Bay Philippines

Certamen 4/10/2008 4/10/2008 Cagliari Italy

46

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Certamen 3/7/2008 3/9/2008 Cagliari Italy

4/25/2008 Catania Italy

4/14/2008 4/21/2008 Catania Italy

3/11/2008 4/8/2008 Catania Italy

3/4/2008 3/5/2008 Catania Italy

4/24/2008 4/25/2008 Augusta Italy

3/5/2008 3/6/2008 Augusta Italy

4/8/2008 4/8/2008 Messina Strait Italy

3/10/2008 3/10/2008 Messina Strait Italy

CS Fu Hai 3/18/2008 4/18/2008 Shanghai People’s Republic of China

3/11/2008 3/18/2008 Kitakyushu Japan

DP Reel 3/20/2008 4/20/2008 Abu Kir Arab Republic of Egypt

4/20/2008 4/20/2008 Alexandria(EGY) Arab Republic of Egypt

3/19/2008 3/20/2008 Alexandria(EGY) Arab Republic of Egypt

Eclipse 3/10/2008 Kakinada India

Elektron II 4/2/2008 4/2/2008 Verdal Norway

3/31/2008 3/31/2008 Verdal Norway

3/13/2008 3/14/2008 Kristiansand Norway

3/9/2008 3/10/2008 Brevik Norway

4/22/2008 4/22/2008 Rosyth United Kingdom

3/16/2008 3/17/2008 Chatham United Kingdom

4/6/2008 4/6/2008 Haugesund Norway

4/20/2008 4/21/2008 Buckie United Kingdom

3/28/2008 3/28/2008 Tyne United Kingdom

4/28/2008 4/29/2008 Drammen Norway

3/11/2008 3/12/2008 Drammen Norway

Fender Care 2 5/1/2008 5/2/2008 Apapa-Lagos Nigeria

Geowave Commander 4/24/2008 4/24/2008 Hammerfest Norway

Geowave Master 3/17/2008 3/18/2008 Stavanger Norway

4/4/2008 4/6/2008 Aalesund Norway

4/30/2008 5/2/2008 Lerwick United Kingdom

Giulio Verne 4/26/2008 Naples Italy

3/31/2008 3/31/2008 Porto Torres Italy

3/17/2008 3/17/2008 Dover Strait United Kingdom

47

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Giulio Verne 3/24/2008 3/24/2008 Gibraltar Gibraltar

Ile de Batz 4/19/2008 4/22/2008 Yokohama Japan

Ile de Brehat 4/24/2008 Brest France

4/19/2008 4/23/2008 Brest France

4/4/2008 4/7/2008 Brest France

4/17/2008 4/17/2008 Dover Strait United Kingdom

3/24/2008 3/24/2008 Dover Strait United Kingdom

Ile de Sein 4/5/2008 4/8/2008 Sydney Australia

IT Interceptor 4/28/2008 4/28/2008 Port Said Arab Republic of Egypt

5/2/2008 Valletta Malta

3/25/2008 4/11/2008 Singapore Republic of Singapore

IT Intrepid 3/12/2008 3/19/2008 Calais France

3/19/2008 3/19/2008 Dover Strait United Kingdom

KDD Pacific Link 3/11/2008 3/11/2008 Busan Republic of Korea

4/8/2008 5/1/2008 Kitakyushu Japan

3/14/2008 4/8/2008 Kitakyushu Japan

KDDI Ocean Link 4/20/2008 4/26/2008 Shanghai People’s Republic of China

4/17/2008 4/20/2008 Yokohama Japan

3/15/2008 3/19/2008 Yokohama Japan

4/26/2008 4/26/2008 Hakata Japan

Leon Thevenin 4/26/2008 4/26/2008 Vigo Spain

4/18/2008 4/19/2008 Vigo Spain

4/28/2008 Brest France

4/13/2008 4/16/2008 Brest France

3/30/2008 4/8/2008 Brest France

3/28/2008 3/29/2008 Bristol United Kingdom

3/20/2008 3/22/2008 Bristol United Kingdom

4/20/2008 4/21/2008 Cadiz Spain

Lodbrog 3/25/2008 3/26/2008 Taichung Taiwan

4/13/2008 4/13/2008 Kaohsiung Taiwan

3/19/2008 3/19/2008 Singapore Republic of Singapore

Maersk Recorder 4/20/2008 4/20/2008 Port Hedland Australia

4/18/2008 4/20/2008 Port Hedland Australia

3/6/2008 4/7/2008 Singapore Republic of Singapore

48

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Maersk Responder 3/12/2008 3/12/2008 Rio de Janeiro Brazil

4/25/2008 4/25/2008 Luanda Angola

3/29/2008 3/30/2008 Luanda Angola

Nexans Skagerrak 3/20/2008 3/20/2008 Esbjerg Denmark

3/22/2008 5/4/2008 Halden Norway

5/4/2008 5/4/2008 Skaw Denmark

Nordkabel 4/10/2008 4/11/2008 Harstad Norway

3/22/2008 3/24/2008 Bergen Norway

Normand Cutter 4/16/2008 4/22/2008 Limassol Cyprus

3/18/2008 4/1/2008 Limassol Cyprus

4/1/2008 4/2/2008 Port Said Arab Republic of Egypt

3/17/2008 3/18/2008 Port Said Arab Republic of Egypt

5/4/2008 5/5/2008 Marsaxlokk Malta

3/18/2008 4/1/2008 Genoa Italy

Peter Faber 5/5/2008 Keelung Taiwan

3/14/2008 3/14/2008 Suez Arab Republic of Egypt

3/17/2008 3/17/2008 Jeddah Saudi Arabia

3/20/2008 3/20/2008 Bab el Mandeb Strait Yemeni Republic

4/3/2008 4/19/2008 Singapore Republic of Singapore

Pleijel 4/30/2008 Kalmar Sweden

3/15/2008 4/6/2008 Kalmar Sweden

4/10/2008 4/11/2008 Korsor Denmark

4/28/2008 4/28/2008 Skaw Denmark

4/9/2008 4/9/2008 Skaw Denmark

4/12/2008 4/12/2008 Lysekil Sweden

Raymond Croze 4/24/2008 4/24/2008 Catania Italy

4/14/2008 4/14/2008 Catania Italy

4/25/2008 4/25/2008 Messina Strait Italy

4/20/2008 4/20/2008 Messina Strait Italy

4/14/2008 4/14/2008 Messina Strait Italy

Rene Descartes 3/24/2008 3/24/2008 Busan Republic of Korea

4/19/2008 4/19/2008 Muara Port Brunei Darussalam

3/25/2008 4/12/2008 Kitakyushu Japan

3/12/2008 3/15/2008 Singapore Republic of Singapore

49

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Rubicon Maverick 4/20/2008 4/20/2008 Suez Arab Republic of Egypt

4/28/2008 4/28/2008 Bab el Mandeb Strait Yemeni Republic

4/8/2008 4/11/2008 Gibraltar Gibraltar

3/27/2008 4/8/2008 Gibraltar Gibraltar

Salma 3/21/2008 3/23/2008 Praia(CPV) Republic of Cape Verde

4/8/2008 4/21/2008 Setubal Portugal

3/11/2008 3/13/2008 Setubal Portugal

3/6/2008 3/6/2008 Las Palmas Canary Islands

SD Newton 4/14/2008 Portland(GBR) United Kingdom

4/3/2008 4/5/2008 Portland(GBR) United Kingdom

Seamec Princess 3/9/2008 Sharjah United Arab Emirates

Segero 3/26/2008 3/28/2008 Kagoshima Japan

3/25/2008 3/26/2008 Kagoshima Japan

3/14/2008 3/14/2008 Kagoshima Japan

Setouchi Surveyor 3/23/2008 4/21/2008 Singapore Republic of Singapore

Skandi Neptune 3/18/2008 3/18/2008 U.S. Gulf United States of America

3/18/2008 3/20/2008 Mobile United States of America

Subaru 4/2/2008 4/5/2008 Singapore Republic of Singapore

Team Oman 4/4/2008 4/4/2008 Port Said Arab Republic of Egypt

4/10/2008 4/10/2008 Messina Strait Italy

Teliri 4/28/2008 Luanda Angola

3/17/2008 3/27/2008 Luanda Angola

Texas Horizon 3/9/2008 3/9/2008 Malta Malta

3/14/2008 Valletta Malta

3/9/2008 3/14/2008 Marsaxlokk Malta

Tyco Decisive 4/23/2008 4/24/2008 Taichung Taiwan

4/30/2008 Singapore Republic of Singapore

Tyco Dependable 3/25/2008 Baltimore United States of America

Tyco Durable 3/20/2008 3/23/2008 Keelung Taiwan

4/4/2008 Naha Japan

Tyco Resolute 4/30/2008 4/30/2008 Panama Canal Panama

3/17/2008 3/17/2008 Panama Canal Panama

3/7/2008 3/8/2008 Curacao Netherlands Antilles

3/18/2008 3/19/2008 Caldera(CRI) Costa Rica

50

VESSEL NAME ARRIVAL DATE SAILED DATE PORT NAME COUNTRY NAME

Tyco Responder 3/19/2008 Curacao Netherlands Antilles

3/9/2008 3/9/2008 Christiansted American Virgin Islands

Tycom Reliance 4/30/2008 Yokohama Japan

Viking Forcados 4/23/2008 5/4/2008 Apapa-Lagos Nigeria

Wartena 4/23/2008 Kalmar Sweden

4/22/2008 4/22/2008 Vestervik Sweden

4/22/2008 4/23/2008 Oskarshamn Sweden

Wave Mercury 3/4/2008 3/6/2008 Kabil Indonesia

4/26/2008 4/27/2008 Singapore Republic of Singapore

4/23/2008 4/23/2008 Singapore Republic of Singapore

4/18/2008 4/23/2008 Singapore Republic of Singapore

Wave Sentinel 4/24/2008 4/25/2008 Portland(GBR) United Kingdom

3/17/2008 3/18/2008 Portland(GBR) United Kingdom

3/15/2008 3/17/2008 Falmouth United Kingdom

4/15/2008 4/17/2008 Dublin Republic of Ireland

Wave Venture 3/8/2008 4/16/2008 Shanghai People’s Republic of China

3/5/2008 3/8/2008 Shanghai People’s Republic of China

51

44

“Botany Bay”

I published recently a modest novel, whose titleis Botany Bay. It is the place in Australia where

Alcatel established asubmarine cable fac-tory in 1989 as part ofits contract for theTasman 2 link. In thissame bay, where twocenturies before theFrench expedition“La Pérouse” made oftwo ships, La Boussole

Warrior event was still in everyone’s memory. Itis for these reasons among others that STC (UK)rejected the Alcatel‘s suggestion to come with ajoint bid, to offer a “European” solution.

One of the winning factors has been thePort-Botany cable factory. Such a factory was astrong requirement from OTC (now Telstra) andthe Australian Government.

Alcatel was the most motivated. Such afactory could expand its influence in the Pacificwhere the three other players were historicallywell established in this region, which representsa large part of their market. They saw thisfactory as a risk for their existing facilities!SubOptic ‘87 in Versailles came at the right time.It is where the Australian teams discovered theFrench model, a close cooperation betweenAlcatel and FT, exactly what they wanted to es-tablish in their country.

My friend, things are changed since, butone thing stays true: When you offer something,the reader can see between the lines if you areor not genuinely motivated and sincere. Thenyour offer becomes really attractive and thisopens the route to “Botany Bay.”

See you soon.

Submarcom Consulting

My Dear Friend

Letter to a friendfrom Jean Devos

Jean Devos

and l’Astrolabe, landed in 1788 to discover thatCaptain Cook was already around bearing theBritish flag. So Botany Bay is now for me thesymbol of a dream which becomes a reality!

Tasman 2 has been yet another chapterin this long Anglo-French competition! Theaward to Alcatel came out as a big surprise tomany, including inside Alcatel. Everybody wasnaturally expecting the British to win that bat-tle, and such an expectation was at that timevery logical.

There were so many difficulties andmisunderstanding between Australia andFrance, the main one being the French presencein the Pacific area, the worse being the nuclearbomb experiment in Tahiti! The sad Rainbow

My dear friend,I have the privilege to look at what is going on in the market from a certain distance . I am now observing a phenomenum I need to think about and share with you. Most of the cable being built recently are owned by carriers in response to carriers’ needs. It is often said that today’s surge is very different from the one of the years 1997-2000. That one was very speculative, driven by investors looking for good and quick return. We all know what happened then .

And it is in Africa today, and only in Africa that one can see the coming back of investors’s cables, the carrier’s carrier model! SeaCom on the East side; Infinity , Main One, recently annouced on the West coast. In each of these press releases I have seen theses words “for Africa by Africans.” Let’s quote Brian Herlihy the President of Seacom: “This is a major milestone in the development of advanced broadband infrastructure for Africa by Africans,” and “We have a mandate that’s been approved by the board that we will provide education research networks throughout Africa with sub-cost bandwidth.“

If you think these venture capital companies are investing there to make money, to get a quick and good return on their investment, you are damned wrong! No, no , not at all! You miss the point. They are not like those people from the “colonial” time who were coming in Africa with the sole intention to serve their own interests!

I am one of these “colonialists,” I guess.

I remember in the 70s -- building coaxial cables -- a long festoon from Portugal to Morocco , Senegal , Ivory Coast and Nigeria. All these African countries had become recently independent. The owners of these infrastructures were adhoc JVs between the operators and the financing was provided by the bank through “supplier credit.” We were proud and happy to bring the much needed connectivity to these new countries. And nobody, I repeat nobody, made any money through these projects.

The idea was that this was a necessary expense to build a much needed infrastructure . We had

the honour to work for the general interest. I keep excellent memory of the various working meetings and the beautiful opening ceremonies! I still have great friends in Africa from that period!

We are in different times and a lot of investments are needed to build the network Africa now needs. African operators, while building their networks, need to get access to money at a reasonnable cost. But I am not sure the carriers’ carrier model is the the right one! It will only produce distressed assets that carriers will be happy to buy cheap later on.

Jean Devos

“For Africa,by Africans”

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Conference Date Venue www

Submarine Networks World 2008

18-20 August 2008 Singapore www.terrapinn.com/2008/snw/index.stm

ITU Telecom Asia 2-5 September 2008 Bangkok, Thailand www.itu.int/ASIA2008

Offshore Communications Conference 2008

4-6 November 2008 Houston, Texas USA www.offshorecoms.com

Pacific Telecoms Conference 2009

18-21 January 2009 Honolulu, Hawaii USA www.ptc.org

SubOptic 2010 11-14 May 2010 Yokohama, Japan www.suboptic.org