GLBC CONNECTS THE DOTS
"Global Crossing’s Services Support Our Plans to Offer Caribbean Users a More Advanced Telecom Infrastructure"
--- Ehsan Emami, President, Global Caribbean Network
ISLAND HOPPING
Pages 28-29, October 2007 Issue, CAPACITY MAGAZINE:
capacitymedia.com
Guy Matthews Profiles Global Caribbean Network, The Cable Operator That Is Predicting An Upswing In Network Traffic In The West Indies
The boom in subsea cable building is gradually picking off the last of the world’s wholesale dead zones. There is practically no inhabited part of the globe, it seems, where the economics of submarine fibreoptics cannot now be marshaled against monopolistic interests.
Cable operator Global Caribbean Network (GCN) toppled one of the remaining capacity-lite bastions last year by connecting 14 West Indian islands by submarine cable, and hooking the region up with the US mainland courtesy of an interconnect deal with Global Crossing. GCN believes that it is now well placed to cash in as users from Puerto Rico to Trinidad flood its service provider customers with demand for inexpensive global IP connectivity.
GCN is a subsidiary of Groupe Loret, a Guadeloupe company. The GCN-1 system on which the company’s future is staked started as an EU-funded contract from Guadeloupe’s government for a cable linking the island with nearby Puerto Rico, St Croix, St Martin and St Barthelemy.
Subsequent phases of development added St Kitts, Antigua, Dominica, Martinique, St Lucia, St Vincent, Barbados, Grenada and Trinidad to the network. A merger with Antilles Crossing has provided both redundancy and future expansion possibilities, and a mish-mash of brands has now been consolidated under the GCN banner.
The cherry on the cake came earlier this year with the Global Crossing arrangement, linking the region with the world out of St Croix, interconnecting GCN’s voice and data traffic via 10Gbit wavelengths and giving Global Crossing a window on the Caribbean market.
"Global Crossing’s services support our plans to offer Caribbean residential and commercial users a more advanced telecom infrastructure,” said Ehsan Emami, GCN’s president at the deal’s signing. Adds commerical director Sebastian Stephens: “South America is next for us. We’ve got plans for landings in Guiana, Suriname, and French Guiana.” The raison d’etre for GCN-1, he says, is to provide an alternative to the region’s only other cable, the East Caribbean Fibre System (ECFS), built in 1995 and owned by Cable & Wireless, France Telecom and AT&T. “ECFS is getting old now, offering only 30Gb where we do 1.3Tb, so capacity levels are very different,” says Stephens.
BANDWIDTH DEMAND
What must now happen to justify all this investment is a major upswing in network traffic, which means the metamorphosis of a disparate collection of island nations, most of them economically hooked on tourism and agriculture, into a powerhouse of bandwidth demand.
The problem, at least, doesn’t seem to be lack of buy-in from the existing residential and enterprise customer base. “There is no doubting local hunger to be a part of the global communications highway, even if the economic case for new capacity is not yet proven,” says Wally Swain, an analyst with the Yankee Group. “There’s been a great deal of interest on the part of governments in the region to encourage new cable landings. Broadband penetration is low, and they want to change that. They also want to diversify their economies. Their local operators have been telling them that the main constraint on broadband is the price of connectivity to Miami.”
Swain says ownership of the area’s only cable and satellite links by incumbents like Cable & Wireless has kept wholesale prices high: “Not only is Cable & Wireless’ infrastructure old, but most of its capacity is used for its own business with not much extra to sell on.”
But laying cables in a widely distributed island region with a smallish population is an inevitable economic risk, he says: “You’ll always be taking a ‘build it and they will come’ approach. It’s not a stupid gamble, but it’s a gamble nevertheless.”
Stephens acknowledges that factors like headcount and geography impose limits on demand. He believes important factors are on GCN’s side, not least the slow opening up of a tightly regulated series of markets, providing much needed domestic competition and hopefully some new buyers of long-distance wholesale connectivity. “The monopolistic situation in the region is finally ending,” he says.
There were a few mobile licences given out in 2001 and 2002, he says, and more recently a campaign across the region to get more licences granted.
REGULATION
The issue here, it seems, has been getting a small army of regulatory bodies to line up in a row and act for the good of the wider region. ECTEC is the regulator for Grenada, St Vincent, Dominica, St Kitts and St Lucia, while Trinidad, Barbados and Antigua have their own institutions – and agendas. Any alternative operators are going to have to cut deals with France Telecom or Cable & Wireless, Stephens says, the latter company he claims GCN has good relations with, including a redundancy arrangement for its subsea interests. New competitors that do spring up will no doubt be banking on an influx of foreign investment to fuel future growth. There are already signs that this is happening, says Yankee Group’s Swain: “There’s interest and investment in the Caribbean now.” GCN sees its own network services as central to generating regional wealth. “I expect to see economic uplift follow on from our arrival,” says Stephens. “Many islands currently rely on bananas, sugar, tourism and not a lot besides,” he says. “They need something else, as some have up to 50% unemployment.”
There wasn’t much chance of “something else” developing with international calls costing $5 a minute, he says. “When we landed in St Kitts, for example, we drove down the price of wholesale capacity by 95%, and you can count on that effect wherever we go.”
FOREIGN SPENDING
The economic magic that a call centre sector has wrought in other developing economies offers an example that Stephens hopes the Caribbean will follow. But Swain warns: “It’s about training people, and making sure they have the language skills to hit your target market. But I applaud any attempt these islands are making to break out of dependence on tourism, which is a fickle beast.” Of course tourism has a part to play: “Everyone takes their laptops on holiday and expects good quality connectivity in their hotel.”
Stephens hopes that a competitive connectivity market will draw multinational businesses to settle in the region. South America is going to have a positive impact, he believes: “Venezuela is creating links in the region, and agreeing to provide cheap oil on a 25-year deal,” he says. “Brazil is looking at the Caribbean as a place to expand.” At the moment, the Caribbean looks more to the US, via Miami, which may now be looking back for expansion potential: “It’s cheap for US businesses to set up here, where the average salary is $100 a week,” he says.
The future for GCN may also point north, as it seeks out new Caribbean openings. It is currently a partner of Columbus Networks and its Arcos network, but this could turn into coopetition if GCN builds fresh cable to offer diversity to capacity buyers perhaps concerned about continuity.
From being so poorly served for so many years, the Caribbean may soon boast considerable diversity – though not, one hopes, outright oversupply.
KEY FACT
> History: In 2002, the government of Guadeloupe declared that it was seeking answers to the island’s shortage of internet bandwidth. The Guadeloupe Numerique project applied successfully for EU funding, and in November 2004 Global Caribbean Network, a subsidiary of Group Loret, was awarded a 20-year concession to lay and operate a cable network, the first phase of which was completed in 2006, subsequent phases in 2007.
Current ownership: GCN’s owner, Groupe Loret, is a conglomerate active over the Caribbean and Latin American region in a number of markets
> CEO and president: Ehsan Emami
> Revenues: In 2005 Groupe Loret turned over €500 million, no separate figures for GCN.
> Customers: Global Crossing, Columbus Networks, Cable & Wireless, and a number of small local service providers
> Network: The first phase of GCN-1, which features cable bandwidth up to 1Tbps, connected Guadeloupe, St Martin, St Barthelemy, San Juan and St Croix, then expanded its reach south to Dominica, Martinique, St Kitts, Antigua, St Lucia, St Vincent, Barbados, Grenada and Trinidad as part of the second and third phases of the project, and with an interconnect deal goes to the 600 cities in 60 countries where Global Crossing delivers services.
> Services: Each GCN cable station houses optical and data communication equipment to provide interconnect points for local telephony and internet service providers, allowing them to deliver broadband access and connectivity to their residential and enterprise customers. |
