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Alcatel Wins Underwater

Light Reading
News Analysis
Light Reading
3/30/2004

Alcatel SA (NYSE: ALA; Paris: CGEP:PA) has won the majority of a new $500 million submarine network construction contract that will provide a terabit of capacity on a key route running from Europe to Singapore (see Carriers Fund Sea-Me-We 4 Cable).

While the contract to build the 20,000-kilometer SEA-ME-WE 4 network has been won jointly by Alcatel and Fujitsu Ltd. (OTC: FJTSY; Tokyo: 6702), Georges Krebs, COO of Alcatel Submarine Networks, says the French vendor's cut of the action accounts for more than half of the total value, though NDAs prevented him from revealing a specific amount (see Alcatel, Fujitsu Build Sea-Me-We 4).

Alcatel will provide SDH equipment and network management systems and build three of the four segments of SEA-ME-WE 4 -- a subsea link between Marseille in France and Alexandria in Egypt, an overground connection from Alexandria to Suez, Egypt, and a further subsea connection from Suez to Mumbai in India. Fujitsu will build Segment 1, a submarine link from Mumbai to Singapore that lands at Chenai on the east coast of India and at four other locations (see network map below).



And Krebs says there's more underwater action in the pipeline. First up is the contract to build a new network, dubbed Falcon, for FLAG Telecom, though he doesn't know if Alcatel stands to win any work there (see Flag Flies After Subsea Market). That network will link the Middle East to Egypt and Hong Kong via India.

Then there'll soon be a pressing need for more capacity on the transpacific route running east out of China, reckons Krebs. "This hasn't been over-equipped in the same way as the transatlantic route, and there aren't a large number of systems [heading east] out of China," though there's plenty of capacity linking China with Singapore.

East Africa is another region that will likely require greater capacity soon, Krebs adds. He says the East Africa festoon (a submarine system that doesn't have any submerged active equipment, such as repeaters) that connects various countries to South Africa, is filling up, though it won't require a massive amount of additional capacity.

While the overall market has suffered during the past two years, these new builds are signs of a slowly recovering sector (see Subsea Market Tanks, Says Probe and Alcatel's Submarine Prospects Sinking). Greater capacity requirements are the result of increasing volumes of international data traffic, driven mostly by the proliferation of broadband connections to homes and businesses, says Krebs. That trend appears to be opening up opportunities for new entrants in the subsea market (see Submarine Startup Surfaces and C&W Boosts Capacity With Azea).

— Ray Sea-Me-Le Maistre, International Editor, Boardwatch

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PastTense
PastTense
12/5/2012 | 2:08:57 AM
re: Alcatel Wins Underwater
Did Corvis/Dorsal compete for this, or are they totally gone? I would have thought that as long as Bannantine was there, Dorsal would remain viable in some form or another. Can anyone provide insight into this?

Thanks,
PT
fanfare
fanfare
12/5/2012 | 2:08:39 AM
re: Alcatel Wins Underwater
Can't really see CORV being inline for any of this, presently. They just don't have the resources to undertake something of this magnitude on their own. They are committed to the path they are currently on and can't afford to take resource away from that endeavor. Only way I could see it; they partner up with another company that is prepared to shoulder most of the financial 'up-front'. I can't even speculate on the mechanics of such an undertaking.

On the bright side .. I gotta say I'm pretty happy about the direction, and more specifically, the position CORV is in right now. If they start to gain some $$ position... who knows where they will go from there.

It's all a matter of 'wait-n-see' ... it's a fun game, as long as you can find all the pieces .. and the dice all roll your way ... and you don't run out of chex mix right in the middle.....

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