R-Com data push

Reliance Communications (R-Com) on Tuesday announced a new undersea cable system that will boost its data carrying capacity by 10 times and treble revenues to $1 billion over the next five years.

By Our Special Correspondent
  • Published 17.01.18
  •  

Mumbai: Reliance Communications (R-Com) on Tuesday announced a new undersea cable system that will boost its data carrying capacity by 10 times and treble revenues to $1 billion over the next five years.

Global Cloud Xchange (GCX), a subsidiary of R-Com, is setting up the Eagle cable system, which is due for completion by the end of 2020.

The 22,000-km system will come at a total investment of $600 million and will connect India with Italy in the West and Hong Kong in the East. It will also have branches connecting other countries. The investment will be self-financed.

R-Com, which exited the consumer facing wireless business as part of its debt reduction plan, has been focusing on the enterprise segment.

Recently, Reliance Jio had acquired the wireless assets of R-Com, which included its 4G spectrum, optic fibre cable network and other assets in a Rs 25,000-crore deal.

Bill Barney, chairman and CEO of Global Cloud Xchange, said the cable would be financed by partners, whose numbers could go up to 30. He added that the company expects to get over $700 million through such pre-sales. It has already tied up with six partners, including Alibaba, for the cable and has raised $300 million in commitments.

Barney said the company expects a spurt in IT and telecom activity in the country over the next five to 10 years, because of which it is betting on the cable business. The cable potentially reaches over 75 per cent of the youth in the globe, which is also very educated, he said.

Sources close to R-Com said while the new system will boost its data capacity, revenues from submarine cables will alone be $1 billion over the next five years. Sources added that such pre-sales where the cable system is financed by partners is a common feature of the industry.

According to Alan Mauldin, research director at TeleGeography, the demand for international bandwidth connected to Asian countries is expected to increase more than 10-fold between 2017 and 2023.

Shares of R-Com ended marginally lower at Rs 31.25 on the Bombay Stock Exchange on Tuesday.