[Level 3 to Build Transatlantic Terabit Cable System]
Tyco Submarine Systems Signs Agreement to Design and Develop High Capacity Undersea Cable
OMAHA, Neb., April 23 /PRNewswire/ -- Level 3 Communications, Inc. today announced that it will build a transatlantic terabit cable system. The company has reached an agreement with Tyco Submarine Systems Ltd. (TSSL) for the design and development of the high capacity undersea cable. The cable system is already under development and is expected to be in service by September 2000.
The cable will be upgradeable to a total capacity of 1.28 terabits per second. For reference, a 1.28 terabit cable system is capable of transporting the contents of the U.S. Library of Congress across the Atlantic in less than 16 seconds. The cable will run from Long Island, New York, the landing point on the East Coast of the U.S., to North Cornwall, the landing point on the West Coast of the UK. An option for construction of an additional cable has also been entered into with Tyco to provide for complete end-to-end redundancy.
Level 3 estimates that the total cost to build the first cable, including both the undersea and land-based portions of the system, will be between $600 million and $800 million. The total cost will depend on how the cable is upgraded over time. The company has prefunded the purchase of significant amounts of undersea capacity as part of its business plan, but may require additional funding depending on the cable's ultimate structure, pre-construction sales and ownership. "Based on preliminary discussions regarding both on and off-balance sheet financing options, we are confident of Level 3's ability to secure incremental funding if necessary," said Douglas Bradbury, chief financial officer of Level 3.
The system will provide a critical link in Level 3's international Internet Protocol (IP) network. In the U.S., the company is building a nearly 16,000 mile intercity, or long distance, network that will connect its 50 local U.S. city networks. Level 3 is also building an approximately 3,500 mile intercity network that will connect 15 local city networks in Europe. A total of 21 city networks are planned for financial centers across Europe and the Pacific Rim. The company currently has purchased capacity on three transatlantic cables and is part of a consortium that is building a transpacific cable.
"With this transatlantic cable system, Level 3 will have the vital link to connect our high capacity networks which are being built in the U.S. and Europe. We're excited at the prospect of providing end-to-end IP based services to our customers worldwide," stated Colin Williams, president of Level 3 International. "By significantly lowering our cost base between any city in Europe to any city in the U.S. we will be able to offer very aggressive price reductions over time, comparable to the reductions we expect to implement on our terrestrial networks. We intend to expand the market for capacity by continually seeking ways to reduce the underlying costs of capacity and passing those cost savings on to our customers."
"This agreement with Tyco is a major milestone for both Level 3 and the international telecommunications community," said Williams. "TSSL is a leader in their field and has great experience in this arena. The Level 3 transatlantic cable will incorporate the world's most advanced undersea communications technology designed for high bandwidth services. By linking the Level 3 U.S. and European networks, we will be able to connect our customers end-to-end, over a seamless international high capacity system."
"Level 3 is a world class organization with proven professionals that is defining innovation and leadership in fiber optic telecommunications," stated Neil Garvey, president of TSSL. "Our two organizations have worked diligently to bring this project to reality, and the results will set new standards of achievement in the subsea fiberoptic, telecommunications marketplace. We intend to work very closely with Level 3 to meet their undersea telecommunications needs for their international network." |
