The objective of the agreement is to maximize the two Groups’ ability to create value, drawing upon the complementary nature of their respective international networks and services: Telecom Italia is concentrated in Latin America, Europe and the Mediterranean, while Teleglobe is particularly active in the North American and Atlantic connectivity markets.
Telecom Italia is to supply Teleglobe with connections between a number of European cities for an overall capacity in excess of 7.4Gbps; a fiber optic ring with a 2.5 Gbps capacity connecting Milan with Greece, Turkey, Israel and Egypt; and lastly a series of links between North and South America totaling 2.5 Gbps.
The bandwidth is provided over an integrated system realized through Telecom Italia’s pan-European backbone, via Mediterranean Nautilus (the Datacom for the Mediterranean Basin, 51%-owned by Telecom Italia) and Latin American Nautilus (a Telecom Italia joint venture with associated Latin American interests).
The contract is for a total value of $200 million, 50 million of which will be relative to voice traffic agreements to be realized in the next five years.
This agreement further strengthens the commercial partnership between Telecom Italia and Teleglobe. The partnership commenced with Sea-Bone, the Telecom Italia IP connectivity service that laid the foundations for the rapid expansion of Internet services between Italy and North America.
Under the agreement, Telecom Italia is to acquire from Teleglobe a ring hosting transatlantic connectivity and IP transit services that will enable full integration of the Telecom Italia European IP network with North and South America.
We are especially pleased – said Oscar Cicchetti, Head of Telecom Italia International Operations – with this agreement reached with Teleglobe. It confirms Telecom Italia’s decision to focus investment and operations in selected areas in order to achieve a position of regional leadership in wholesale and retail services.
International Operations is the Telecom Italia Business Unit committed to creating value on international markets by capitalizing on the entrepreneurial and technological experience of one of the world’s top telecommunications companies.
The BU strategy is focused on maximizing returns and synergies from two business areas: the management of international interests – spanning incumbents and newcomers in various domestic markets – and the development of international services.
Overall pro-forma 2000 turnover for the BU was equal to around US$ 4.8 bn.
