Reliance Communication (RCom) said it would construct a 22,000km undersea cable network, a submarine cable, at an investment of $600 million. A top company executive said that this move that would help expand the company’s enterprise segment after it shut down its wireless service.
The new sub-sea cable system , Eagle, would connect Asia and Europe over a 22,000 route kilometer after completion of the submarine cable. The submarine cable is being built by Global Cloud XChange (GCX). The Eagle will have its hub in Mumbai.
It would span from Mumbai to Italy in the west and Hong Kong in the east. GCX already has five sub-sea cables namely, FEA, FA-1, FNAL, FALCON and HAWK – with a total of 68,698 route km.
According to Bill Barney, RCom’schief executive officer (CEO) and chairman of CEO of Global Cloud XChange, GCX’s revenue would jump threefold to about $1 billion annually in the next five years through the new cable system.
“We will be building the world’s largest submarine cable, replacing our existing cable system…like our previous systems, it will be funded from our partners,” Barney said at a press conference, adding that the new fibre network will focus on emerging markets from Japan to eastern Europe.
“We would need about $600 million to build the cable, which we expect to come in from our project partners. We are in discussions to rope in as much as 30 partners, while we anticipate to get about $700-800 million in pre-sales itself,” Bill Barney, CEO at RCom said.
“This is our largest investment in the fixed line space. The reality is this business (GCX) has been running pretty much separately. It has been highly successful in the past five years. When the old RCom goes out and the new RCom comes in, it will start to see that this is a very strong company,” he said.
“One of the challenges is that we are going through setting up an enterprise company while we are actually taking down a wireless company. These aren’t easy,” RCom chief executive Bill Barney told reporters here. — PTI
The announcement of the new ‘Cloud and Fiber’ initiative is line with the current effort to build a “new RCom” that primarily concentrates on providing various internet-related services, information technology applications as well as expanding data centre footprints.
RCom announced it last year that it had finalized a debt resolution plan through which the company expects to reduce its debt to Rs39,000 crore from the Rs45,000 crore it owed lenders by the end of October this year.
“The (enterprise) business was doing very well in the past three-four years. It will match up to not only with players in the Indian market but with overseas players as well… the challenge was we were actually setting up an enterprise business while we were taking down our wireless company…it’s not easy,” Barney said.
The firm had said last year it would shut down voice call services. The move followed its failure to merge with Aircel in October 2017.