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New Submarine Cable Systems
Caribbean Operator Reports on Cable Plans, Regional Expansion
Throughout the recent cycles of boom and bust all too common in the submarine fiber optic cable industry, the Caribbean has been a region of consistent activity. Cable projects in the region are not large, as the distances involved are much smaller than in the transoceanic regions, but there has been almost constant cable building in the Caribbean since 2004.
The most recent new cable project is the East West Cable, announced by Cable & Wireless in May. Cable & Wireless’ Caribbean operations, known as LIME (Landline, Internet, Mobile, Entertainment), recently briefed the media on its plans for expansion in the region, including the East West Cable.
LIME said that starting in 2010 it would invest up to US$100 million into capital projects in Jamaica, more than a third of which will fund the new submarine cable. Overall, LIME plans to spend US$600 million in its Caribbean operations over a five-year span.
The East West Cable will connect the Cayman Islands, Jamaica, the British Virgin Islands and the Dominican Republic at a cost of US$35-million.
"Over the next five years, we intend to invest more than US$600 million in our 13 business units across the region to improve the services that we offer, and to roll out the kind of new technologies and innovative services that will help us to retain our present customers and attract new ones," said LIME Caribbean chief marketing officer and chairman of LIME Jamaica, Chris Dehring,
Besides the Cayman Islands, Jamaica and the British Virgin Islands, LIME serves Anguilla, Antigua & Barbuda, Barbados, Grenada, Dominica, Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines and Turks & Caicos. So far, LIME has not discussed any new submarine cable links to these islands, but these are a possibility as the carrier expands its Caribbean operations.
Submarine Power Cables
Terna Plans Electricity Ring for Islands
Italian electricity grid operator Terna plans to create what it calls an “electricity ring” connecting the islands of Italy’s Campania region. Authorization procedures are underway for the first segment of the ring between Capri and Torre Annunziata.
The Capri-Torre Annunziata link represents the first segment of the new electricity ring that will connect the islands of Capri, Ischia and Procida with the mainland through a system of submarine cables. By the end of 2010, authorization procedures will begin for the other segments forming the ring.
For the Torre Annunziata-Capri segment, the completion of authorization procedures and consequent opening of building sites is scheduled for the first half of 2011. The entrance into operation of the power line is expected by 2013. In line with the Development Plan, investments will total approximately 45.5 million euros; the estimated total for the entire ring amounts to 130- 140 million euros.
The project is shared with the Regional Authorities, the Provincial Authorities of Naples and the two municipalities involved and includes building an AC 150 kV cable power line 30 km in length (29 of which submarine and 1 on land) that will connect the present sub-station in Torre Annunziata with a new sub-station in Capri that will be located at the Ecological Island in Gasto. The power line will then be connected to the local distribution grid. The submarine cable will reach a maximum depth of 120 meters; the power line’s land segment was designed to cross most of the road routes or land areas that are not in use, thus avoiding areas intended for urban development.
Development measures are necessary principally owing to the unreliability of the electricity production systems presently in use (generally supplied with fuel oil) and owing to the lack of a direct connection with the mainland grid; both these factors increase the risk of black outs particularly during the summer months, consequently reducing the electricity service’s quality.
The new “Torre Annunziata-Capri” electricity connection and more generally, the entire “electricity ring” connecting the islands in Campania is part of the submarine electricity “bridges” projects that Terna has scheduled for strengthening the islands’ grid and the electricity interconnection with foreign countries.
Among these, the SA.PE.I. connection between Sardinia and the mainland that will be completed by the end of this year; the new Sorgente-Rizziconi power line between Sicily and Calabria, whose submarine segment is presently under construction; the Villanova-Tivat connection between Italy and Montenegro, under authorization, and the connection between Italy and Tunisia.
Market Snapshot
BSNL, MTNL Report Financial Struggles
2010 has only been a mediocre year to date for new submarine fiber optic cable supply contracts as a number of large-scale projects seem mired in uncertainty. One project, however, has dragged out longer than most with virtually no news or public announcements to indicate where it stands and if it may still proceed. This is the Millennium Telecom Ltd (MTL) project.
MTL’s cables would run from India west to the Persian Gulf and East to Southeast Asia, linking numerous countries along the route. MTL is a joint venture between Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), two large government owned Indian carriers.
The MTL project was first announced in 2006, but it has been nearly a year since either company has made any comment about the project. The last public statement came in the fall of 2009, when MTNL’s annual report stated that the cable project was moving forward and reported its building schedule with considerable optimism.
There have also been long stretches of complete silence about the project. For example, more than a year passed between public statements prior to the 2009 announcement.
Although there is almost no available public information about the submarine cable projects for us to evaluate, there is plenty of other news about BSNL’s and MTNL’s financial situation, which may at least shed some light on the state of the companies’ operations.
BSNL reported a loss of nearly US$380 million for the 2009-2010 fiscal year ending in June, with revenues falling by 10%. MTNL, meanwhile, reported a loss for the quarter ending in June that was 10 times the size of the same period a year earlier, due to high labor costs. Both companies also were criticized by India’s Comptroller and Auditor General for poor financial management.
There may be some reasons for optimism for the future, however, as BSNL saw strong subscriber growth and hopes to return to profitability in the 2010-2011 fiscal year, while MTNL saw its revenues grow despite the steep loss and is working to get its expenditures under control. |
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