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FLAG ROUND THE WORLD CABLE ENTERS INTO SERVICE

Bell Atlantic Corp and Cable & Wireless Plc has started running services on their $1.5bn, 28,000 kilometer Synchronous Digital Hierarchy fiber-optic cable, known as FLAG, for Fiberoptic Link Around the Globe. It is said to be the longest cable ever constructed, linking the UK to Japan via the Middle East, and stopping off to provide connections to countries along the way. The two companies claim the cable links up 75% of the world’s population to a broadband international network. Unlike other cable laying efforts, the new cable has been majority funded by private investors, rather than being funded and operated by a consortium of telecommunications firms. That means that any telecommunications companies can buy capacity on the fiber. The cable is being managed by Bermuda-based FLAG Ltd, a company in which Bell Atlantic hold a 38% stake and Cable & Wireless 18.5%. FLAG has already signed up 66 carriers for 7% of the fiber’s capacity. Telecoms companies can then resell the capacity to other companies for all of the 25 year lifespan of the cable, having paid a one off fee, and yearly maintenance fees. FLAG has a ten year business model, and will sell capacity on the 10Gbps cable (enough for 1.2 million simultaneous voice calls), hoping to make it into profit within four years, once 20% of the capacity should have been sold. It hopes to have sold over 65% of the cable bandwidth by the end of ten years, which will make it fully profitable. FLAG is also looking to double the income the cable generates by using dual-wavelength division multiplexing technology – forcing two different frequencies of light down the cable to double the bandwidth – which it will add to the system when it sells close to 100% of the fiber capacity. FLAG is competing with a consortium funded by France Telecom SA and Singapore Telecom that has British Telecommunications Plc on board, although the similarly routed SEA-ME-WE-3 cable comes into operation in 1999, two years behind FLAG, and not long before the broadband communications satellite ventures Motorola Inc’s Celestri and Alcatel SA’s Skybridge come into operation. FlAG claims not to be threatened by any of the competition, claiming that it will be cheaper. The Flag cable is due to provide an alternative US-Asia link to trans-Pacific cables when it links up with C&W and WorldCom Inc’s 50/50 joint venture transatlantic cable, Gemini, which enters operation in February (CI No 3,300). FLAG chairman Daniel Petri says the possibility of offering plain data services is still under consideration.

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CBR Staff Writer

CBR Online legacy content.