Transpacific fiber projects combined
broadband-guide.com
News, July 1998
Transpacific fiber projects combined
In the fiercely competitive world of telecommunications, it may be
a rare occasion when two or more carriers agree on any strategy.
Recently, however, 11 global carriers decided that cooperation in
procuring a transpacific cable system platform to showcase their
individual products and services was the best technical and
economical solution for remaining competitive.
The consortium, at a meeting last April in Honolulu, HI, announced
plans to merge two previously announced transpacific systems.
The two systems, AT&T's TPC-6 Cable Network and
WorldCom's Japan-U.S. Cable System, will be merged into a
single entity to become the Japan-U.S. Cable Network, an
undersea fiber-optic project that is completely carrier-owned and
financed. This sets the network apart from other transpacific cable
ventures, such as Pacific Crossing and Pacific Express, which are
private cable systems built with the intention of leasing capacity to
telecommunications carriers. The Japan-U.S. Cable Network is
planned to begin operations in mid-year 2000.
Consortium member carriers involved in the new system's planning
include AT&T, Cable PGE, Sprint, and WorldCom. Two days
after the initial announcement meeting, a meeting of potential
investors was held to give carriers the opportunity to make initial
capacity commitments to the project. At that time, carriers
subscribed to 77% of the system's total planned capacity.
At press time, other potential investors were determining their
capacity commitments and working out the final details of their
involvement in the project. Total commitments were fast
approaching 100% of system capacity, sources say.
The Japan-U.S. Cable Network will consist of 21,000 route-km
of optical-fiber pairs in a self-healing, open-ring configuration. A
northern route will directly link mainland Japan and the United
States, while a southern route will link Japan, Hawaii, and the
continental United States. Landing points for the northern route are
Kita-Ibaraki, Japan, and Point Arena, CA. The southern route will
have landing points in Shima, Japan; Kahe Point, HI; and San Luis
Obispo, CA. A third landing point in Japan is Maruyama, between
the two routes. The system will initially operate at 2.5 Gbits/sec on
each of 16 wavelengths per fiber pair. It will be expandable to 10
Gbits/sec, a capacity tentatively planned for around mid-2001.
That equates to the ability to initially handle 967,680 simultaneous
calls and, later, to handle more than seven million simultaneous
calls.
The stakes are high for the consortium members to receive "initial
party" status - upwards of $50.6 million - but, according to
Patrick Estenes, vice president of GST International, there are
certain benefits for the carrier.
"You can come in at higher or lower levels, but gaining initial status
entitles you to become a member of the interim management
committee, which oversees the activities of the interim
procurement committee and the construction and maintenance
agreement committee," says Estenes. "Typically, the carriers
provide staff to those various committees to work the elements of
the project...to draft up the construction and maintenance
agreement by-laws, and the rules and regulations by which the
system will be operated. It also oversees the technical aspect of
the project under the interim procurement committee, where
people are overseeing the development of the system specification
and negotiations with the suppliers, as well as the actual
implementation of the submarine contract itself."
At press time, no contracts had been completed in terms of
equipment, contractors, or suppliers. However, a meeting was
scheduled for the signing of a construction and maintenance
agreement for this month. Discussions with the potential players
have been ongoing.
The number of transpacific cables currently either planned or
under construction may appear to indicate a capacity overload for
the area, but Estenes believes the opposite is more likely the case
- which explains why so many carriers are jumping on the
bandwidth bandwagon.
"What's happening is that there is already a significant shortage of
capacity across the Pacific, being primarily driven by data," says
Estenes. "While one project addressed the needs of China, Korea,
and Japan into the United States and landed in Guam, it
completely bypassed Hawaii. So it was felt by many carriers that
there was enough need for capacity and route diversity to put
another system which will now land at three cable stations in
Japan, one in Hawaii, and two in the United States."
Most industry analysts agree there is definitely a lack of undersea
fiber-optic capacity. Tom Soja, managing director of T. Soja and
Associates, an analysis and consulting firm based in Brookline,
MA, reiterates the mounting pressure data communications
components are placing on carriers and other parties to accelerate
their plans to build transpacific and transatlantic cable networks to
meet capacity demand.
"There are virtually no large amounts of available transpacific
capacity to speak of right now," says Soja. "At least not until the
China-U.S. consortium cable gets up and running, planned for next
year. New carriers coming into the business are having a tough
time getting major carriers to part with their spare capacities.
That's where the opportunity exists for new consortium systems,
such as the Japan-U.S. Cable Network, and private systems like
Pacific Crossing, being constructed by Global Crossing Ltd."
While competition rules the telecommunications market due to
diverse carrier companies with various capabilities, the consortium
provides opportunities for cooperation among those same carriers
in order to get the biggest return on investment.
"Nobody goes everywhere, as far as delivering capacity or
services to various destinations," says Estenes. "That creates a
need for people to get together to foot these large infrastructure
bills, in excess of a billion dollars. No single company can do that
on its own today."
That means the global carrier community will probably continue to
work together. Given the size of the projects, it's prudent to work
together to find the means to provide these big bandwidth pipes
across the Atlantic and Pacific, says Estenes. Other carriers seem
to agree with him.
"Our companies compete in the services market, not on cable
systems," says Rich Young, group manager for Sprint's Submarine
Cable Systems. "From my perspective and, I believe, that of my
colleagues, we're driven to provide the lowest unit cost for the
best possible technical solution that will meet our companies' future
needs in the global market. The best solution, in this case, was for
two separate groups planning cable systems to merge into one
carrier cable project."
Operation of the southern route is expected to begin by the first
quarter of 2000, with the northern route and ring closure
completed by second quarter 2000.
cCopyright 1995-1998 PennWell Media Online LLC
This page was updated on 29-Jul-98.
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