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Reliance Communication plans undersea cable to meet data demands of Asia, Europe

The company has already joined hands with Alibaba and five other partners, generating $300 million in commitments for the cable systems.

twitter-logo BusinessToday.in   New Delhi     Last Updated: January 16, 2018  | 20:47 IST
Reliance Communication plans undersea cable to meet data demands of Asia, Europe

Reliance Communication is working on plans to lay down sub-sea cables reaching up to Europe and Asia. Global Cloud Xchange (GCX), a wholly owned subsidiary of RCom, will undertake the project worth $600 million and will complete it by 2020.

Named the Eagle sub-sea cable system, the 68,000-km long network will originate from Mumbai. One end of the network will reach Italy in the West, via Africa, and the other one will go up to Hong Kong in the East. This project is in line with GCX's plans to keep cloud and fibre initiative at the core of their strategies.

The project is scheduled to be completed in the third quarter of 2020 and can earn $1 billion every year, RCom chief executive Bill Barney was quoted in a PTI report. The new cable network will increase company's total capacity by ten times as against the current capacity, he added.

The undersea cable network will be financed by as many as 30 partners, Barney said. The construction of the cable systems will be completely self-financed, with no upfront financing or investment requirements from the Company, RCom said in a stock exchange filing.

The company has already joined hands with Alibaba and five other partners, generating $300 million in commitments for the cable systems. RCom expects to raise $700 million through these pre-sales against the $600 million required for the cable systems.

This cloud and fibre initiative of RCom will capitalise on India's geographic closeness with growing economies in Asia and Europe, and growing demand for bandwidth and related infrastructure from these regions, the company mentioned in the presentation submitted to BSE.

Barney said the company expects a spurt in IT and telecom activity in the country over the next five to ten years, due to 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 added.

Riddled with debt and facing a competitive market, RCom has exited the consumer telecom business to focus on the enterprise segment. Anil Ambani recently sold its spectrum to Reliance Jio, which is owned by his elder brother Mukesh Ambani for an estimated Rs 23,000 crore. This will help the company to avoid insolvency petitions, and eventual liquidation.

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