The Naked Truth about Submarine Cables! By Amr Eid Chief Commercial Officer

Transcription

1 The Naked Truth about Submarine Cables! By Amr Eid Chief Commercial Officer

2 Agenda Covered Geographical Area: West Africa, Europe, Middle East, India, up to the west Coast of Australia Key submarines in that region Highlight of infrastructure upgrading. Snapshot of new project proposed. Introducing newopportunities.

3 Overview 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

4 Middle East and North Africa cables snapshot Submarine Network Name RFS Year Length (km) Lit Capacity (Gbps) Max Capacity (Gbps) EUROPA* (Cyprus and Lebanon) ALASIA* (Cyprus Syria) Middle East North Africa (MENA) Cable System/Gulf Bridge International (GBICS) GBICS/MENA Cable System MedNautilus Submarine System Tata TGN-Gulf OMRAN/EPEG Cable System Tamares North Pishgaman Oman Iran (POI) Network Jonah Europe India Gateway (EIG) Saudi Arabia-Sudan-2 (SAS-2) IMEWE The East African Marine System (TEAMS) SEACOM/Tata TGN-Eurasia FLAG FALCON Transworld (TW1) SeaMeWe Kuwait-Iran Qatar-UAE Submarine Cable System Saudi Arabia-Sudan-1 (SAS-1) SeaMeWe Lev Submarine System Fiber Optic Gulf (FOG) FLAG Europe-Asia (FEA) Aletar BERYTAR CADMOS UGARIT Aden-Djibouti CIOS UAE-Iran *Proposed Cables

5 Middle East cables (1/2) Submarine Networks Since 2010, IMEWE, Europe-India Gateway, Hawk, TE North, TGN-Gulf, Gulf Bridge, Jonah, and Loukkos have all boosted the amount of submarine cable capacity serving North African and Middle Eastern countries Libya International Telecom s Silphium cable, launched in early 2013, provides additional capacity between Libya and Greece having potential capacity of 1.2Tbps Launched in February 2012, Tata Communications TGN-Gulf cable links Saudi Arabia, Bahrain, Qatar, Oman, Saudi Arabia, and the U.A.E. to a branching unit on the SEACOM/TGN-Eurasia cable Also in early 2012, Gulf Bridge International extended a leg of its cable to Al-Faw, Iraq. This extension represents Iraq s first direct connection to an international submarine cable. Reliance Globalcom landed the older Falcon cable in Al-Faw in July 2012 Proposed Submarine Cables Algerie Telecom in the process of building a 500-kilometer cable between Oran, Algeria and Valencia, Spain estimated at $16million SeaMeWe-5 cable - essentially spanning similar ground as SeaMeWe-3 and SeaMeWe-4, from Southeast Asia to the Middle East and Western Europe Asia Africa Europe-1 (AAE-1) cable headed by Telecom Egypt, is a similar project. Like all cables that run from the Mediterranean to the Indian Ocean, these would have a terrestrial span in Egypt Bay of Bengal Gateway (BBG) cable would avoid Egypt. BBG would run from Malaysia to Oman via Sri Lanka and India and connect in Oman to the terrestrial EPEG system. EPEG would then provide a diverse route to Europe, avoiding Egypt. Bay of Bengal Cable AAE-1 Cable (Proposed cable routes)

6 Middle East cables (2/2) Terrestrial Networks JADI - The Jeddah-Amman-Damascus-Istanbul (JADI) network that links Saudi Arabia and Turkey via Jordan and Syria was launched in July The cable was reportedly out of service as of early 2013 due to the ongoing civil war in Syria RCN - The Regional Cable Network (RCN) is another terrestrial link meant to function as an alternative route to the submarine cable networks crossing the Mediterranean and Red Seas. The system, while similar to JADI, will be considerably longer, stretching approximately 4,000 kilometers from the U.A.E. to Istanbul via Saudi Arabia, Jordan, and Syria. RCN is slated to provide 2.4 Tbps of initial capacity. The system was due to begin service by late 2012, but is delayed due to the civil war in Syria EPEG Omantel, Telecommunications Infrastructure Company of Iran, Cable & Wireless Worldwide (now Vodafone), Rostelecom, and Delta Telecom developed a new Europe Persia Express Gateway (EPEG) cable which links Frankfurt to Oman via Russia and Iran. The system entered service in January As part of the project, Omantel built a new submarine cable linking the cities of Barka, Diba, and Khasab in Oman with Jask, Iran GBICS Gulf Bridge International (GBI) has integrated a terrestrial link into its submarine network to provide route diversity for its customers. The GBI submarine cable spans the Persian Gulf and links up with the MENA cable to provide connectivity to the Mediterranean via Egypt. In late 2012, however, GBI inaugurated a terrestrial route from its landing at Al-Faw through Iraq and Turkey into Europe. This allows GBI to offer Asia-Europe route diversity that avoids Egypt MEETS (proposed) consortium of Middle Eastern operators, including du, Vodafone Qatar, Zajil, and Zain, has announced plans for a terrestrial route connecting to Europe. The system, known as the Middle East-Europe Terrestrial System (MEETS), would initially provide connectivity between the UAE, Qatar, Bahrain, and Kuwait over a fiber pair acquired on the GCC Interconnection Authority s power grid. The first phase will be ready for service in early 2015 at a cost of $36 million. A second phase of the network would extend connectivity to Turkey via Iraq

7 Middle East Traffic Flows Middle Eastern International Internet Bandwidth by Region Region Gbps Percentage Middle East 242 6% Africa 26 1% Asia 268 6% Europe 3,677 85% U.S. & Canada 99 2% Middle East Total 4,312 Synopsis: Majority of Bandwidth from the Middle East continues to flow to Europe (85%) Turkey s international Internet bandwidth amounted to 60 percent of the total for the Middle East with 2.6 Tbps Saudi Arabia and the U.A.E. continued to experience rapid increases, and have emerged as major Internet hubs in the region Between 2009 and 2013, international Internet capacity increased 10-fold to Saudi Arabia and 7-fold to the U.A.E. Outlook: New efforts to establish carrier-neutral colocation and internet exchange facilities With a more vibrant local market for IP transit and local content hosting, a potential reduced dependence on individual pipe and port transactions with Europe Along with reducing bandwidth prices, these structural changes may foster an IP transit marketplace that simply didn t exist before in the Middle East.

8 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

9 Africa cables snapshot RFS Length Lit Capacity Max Capacity Submarine Network Name Year (km) (Gbps) (Gbps) South Atlantic Express (SAEx)* WASACE Africa* South Atlantic Cable System (SACS)* MENA Cable System/Gulf Bridge International Silphium Algeria-Spain Africa Coast to Europe (ACE) West African Cable System (WACS) Loukkos Lower Indian Ocean Network 2 (LION2) Seychelles to East Africa System (SEAS) Libreville-Port Gentil Cable TE North/TGN-Eurasia/SEACOM/Alexandros Europe India Gateway (EIG) Hawk Ceiba Saudi Arabia-Sudan-2 (SAS-2) Eastern Africa Submarine System (EASSy) IMEWE Main One GLO HANNIBAL System Lower Indian Ocean Network (LION) The East African Marine System (TEAMS) SEACOM/Tata TGN-Eurasia Angola Domestic Network System (ADONES) Atlas Offshore FLAG FALCON SeaMeWe Med Cable Network RFS Length Lit Capacity Max Capacity Submarine Network Name Year (km) (Gbps) (Gbps) Saudi Arabia-Sudan-1 (SAS-1) SAFE SAT-3/WASC ALPAL Atlantis SeaMeWe Italy-Libya FLAG Europe-Asia (FEA) Aletar Trapani-Kelibia Estepona-Tetouan Aden-Djibouti Eurafrica *Proposed Cables

10 Africa cables (1/2) Submarine Networks For years, submarine capacity to West Africa had been provided almost exclusively by the consortium-owned, expensive and limited SAT-3 cable system, stretching from South Africa to Portugal Main One launched service in July 2010 with a 7,000-kilometer cable connecting Nigeria and Ghana to Portugal Glo-1 launched in October 2010 and connects Nigeria and Ghana to the United Kingdom The West African Cable System (WACS) consortium cable entered service in May 2012 and links South Africa to the U.K., connecting several West African countries along the way. The France Telecom-led Africa Coast to Europe (ACE) cable launched service in December 2012 and connects France and Portugal with Senegal, Gambia, Guinea, Sierra Leone, Liberia, Cote d Ivoire, Equatorial Guinea, and Sao Tome. The cable may be extended to South Africa in the future with additional landings in the Democratic Republic of Congo, Angola, and Namibia. Plans finally came to fruition in July 2009 with the completion of the SEACOM cable. Further capacity became available upon completion of The East African Marine System (TEAMS) in October of the same year. Another major project, the Eastern African Submarine Cable System (EASSy), came online in July The recent submarine cable builds along the East African coast have turned Kenya into a regional submarine cable hub. Four cables now land in Mombasa (SEACOM, TEAMS, EASSy, and LION2 between Kenya and Mayotte). Proposed Cables With a large number of new cables now in service along both coast of Africa, new projects are focused on alternate routes. Angola Cables and Telebras are planning to build the South Atlantic Cable System (SACS) between Angola and Brazil. Angola Cables is a consortium, comprised of incumbent Angola Telecom, ISPs MSTelcom and Movicel, and mobile operators Unitel and Startel. SACS is scheduled to enter service in the fourth quarter of Another cable is planned for the South Atlantic as well. South African investment group efive is planning the South Atlantic Express (SAEx) cable linking South Africa and Brazil with a branch to St. Helena. efive hope to have the cable in service by the first quarter of South Atlantic Cable System South Atlantic Express Cable (Proposed cable routes)

11 Africa cables (2/2) Terrestrial Networks In January 2013, the government of South Sudan stated its intention to deploy a fiber optic network connecting the capital Juba with submarine cables in east Africa. Internet service in the new country is currently provided almost exclusively via satellite, and terrestrial fiber links are expected to vastly reduce costs and improve reliability In June 2010 a joint declaration was signed by Algeria, Niger, and Nigeria for the rollout of a 4,500-kilometer terrestrial fiber-optic cable from Algiers via Zinder (Niger) to Abuja (Nigeria). It is scheduled for completion in Construction of a 200-kilometer missing link of the Trans-Sahara Highway from Assamaka (Algeria) to Arlit (Niger) is also scheduled to begin in 2013 Ethiopia state-owned incumbent (and monopoly) operator Ethio Telecom built a national fiber backbone in The 10,000-kilometer network fans out from the capital Addis Ababa and connects 78 towns with a capacity of STM-1, 46 towns with a capacity of STM-16, and nine towns with a capacity of 10 Gbps. Ethio Telecom has international connectivity through SEACOM via Djibouti Tanzania the government first launched its National Information Communication and Technology Broadband Backbone (NICTBB) in 2010, and finished the last of three terrestrial rings covering the nation in The NICTBB is the terrestrial continuation of EASSy and provides overland connections to bordering countries Kenya, Uganda, Burundi, and Zambia. Its operational management is handled by fixed line incumbent TTCL Uganda The National Information Technology Authority of Uganda (NITA-U) is in the process of building the National Data Transmission Backbone Infrastructure and e-government Infrastructure (NBI and EGI) projects. These projects aim to connect all major towns in the country through a 1,500-kilometer fiber system with border connections to Kenya, South Sudan, and Rwanda Kenya Soliton Telmec of Kenya is managing the system for the Ugandan government South Africa Liquid Telecom, owned by Zimbabwe-based Econet, is constructing a large fiber network spanning Zambia, Zimbabwe, Botswana, the DRC, and South Africa, and reaching the border of Mozambique. Liquid Telecom s network penetrated into southern DRC in 2012, reaching the cities of Lubumbashi and Kolwezi. Liquid Telecom also extended its network footprint by purchasing the East Africa fiber assets of the Altech Group, which includes international submarine cable capacity on SEACOM. These terrestrial assets consist of Kenya Data Networks, Infocom Uganda and Altech Stream Rwanda, and serve to expand Liquid s presence in Africa from Cape Town to Nairobi

12 Africa Traffic Flows African International Internet Bandwidth by Region Region Gbps Percentage Africa 133 9% Asia 75 5% Europe 1,235 85% Latin America 0 0% U.S. & Canada 13 1% Africa Total 1, % Synopsis: Traffic flow is similar to the Middle East, with the majority of bandwidth from Africa flowing to Europe (85%) The launch of SEACOM, TEAMS, and EASSy submarine cable systems on the East African Coast, and Main One, Glo-1, WACS, and ACE on the West Coast have spurred sub-saharan Africa s rapid growth, increased market competition, and lowered prices These new cables have also encouraged operators to establish PoPs for IP transit in sub-saharan African countries: SEACOM offers IP services in South Africa, Mozambique, Tanzania, and Kenya Main One Cable offers IP services in Nigeria and Ghana Telecom Italia, Level 3 and Saudi Telecom among a host of companies establishing Djibouti as a large regional IP transit hub Outlook: New connections have helped make communications more affordable with wet capacity prices falling as competition increases. Cross-border terrestrial networks are expanding rapidly in Africa but carriers still largely use intra-african capacity to interconnect with submarine cable stations for onward transit to Europe, rather than to facilitate the exchange of African traffic

13 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

14 Europe main cables snapshot Lit Capacity RFS Year Length (km)(gbps) Max Capacity (Gbps) Submarine Network Name Arctic Fibre* EUROPA* Russian Optical Trans-Arctic Cable System (ROTACS)* WASACE Europe* Hibernia Express* ALASIA* Emerald Express* MedNautilus Submarine System MENA Cable System/Gulf Bridge International Silphium Algeria-Spain Balkans-Italy Network (BIN) Tamares North Jonah Africa Coast to Europe (ACE) West African Cable System (WACS) TE North/TGN-Eurasia/SEACOM/Alexandros Europe India Gateway (EIG) Hawk Pencan IMEWE GLO Caucasus Cable System SHEFA GO-1 Mediterranean Cable System Atlas Offshore High-capacity Undersea Guernsey Optical-fibre (HUGO) BCF SeaMeWe Med Cable Network Janna RFS Length Lit Capacity Max Capacity Submarine Network Name Year (km) (Gbps) (Gbps) FARICE Svalbard Undersea Cable System Vodafone Malta-Sicily Cable System (VMSCS) Greece-Western Europe Network (GWEN) INGRID Apollo Tata TGN-Western Europe SAT-3/WASC ALPAL FLAG Atlantic-1 (FA-1) Tata TGN-Atlantic Hibernia Atlantic TAT SeaMeWe Columbus-III Atlantic Crossing-1 (AC-1) FLAG Europe-Asia (FEA) *Proposed Cables

15 Europe cables (1/2) Europe is the most developed telecommunication market in the world, being the first user of subsea cables. This in mind, European markets have achieved a peak and now International Internet capacity growth in Europe continued to steadily contract in 2013 International Internet capacity grew 32 percent in 2013 to reach nearly 76 Tbps, compared to 40 percent growth in 2012 and 49 percent growth in 2011 Intra-regional capacity comprised almost 80 percent of all international Internet connectivity connected to Europe The trans-atlantic route s share of international capacity connected to Europe fell slightly to 12 percent. Internet capacity grew most rapidly between Europe and Africa, rising 71 percent between 2012 and 2013 This said however, Europe has continued to grow as an interregional Internet hub for various sub regions of the globe. For instance, in the past decade, interregional Internet capacity to Europe has grown dramatically for the Middle East, North Africa, Sub-Saharan Africa, and South Asia (see Figure: Changes in Sub regional Capacity Connected to Europe, ). North Africa and the Middle East, in particular, are dependent on Europe for more than 80 percent of their international Internet bandwidth connectivity

16 Europe cables (2/2) Germany continued to be the largest consumer of international bandwidth in Europe, followed by the United Kingdom and France coming in third Europe s four Internet hubs (Frankfurt, London, Paris, and Amsterdam) continued to amass high bandwidth and traffic levels in 2013, though notably, average network utilization levels have edged slightly down in each of those cities over the past five years. Marseille and Kiev have seen more rapid international bandwidth and traffic growth in the last five years than any other major European cities, with compounded annual growth in excess of 100 percent Country 2013 CAGR Germany 28,644 44% United Kingdom 20,268 39% France 18,322 44% Netherlan ds 15,339 43% Sweden 6,013 39% Spain 4,995 35% Russia 4,768 57% Italy 4,381 34% Belgium 3,568 73% Austria 2,981 43% Poland 2,924 57% Denmark 2,723 41% Czech Republic 2,526 55% Hungary 1,990 44% Ukraine 1,613 89% International Internet Bandwidth Rank Route Netherlands - United Kingdom 4,593 2 Germany - Netherlands 4,581 3 France - Germany 4,150 4 United Kingdom - United States 4,118 5 France -United Kingdom 3,670 6 France - Spain 2,732 7 Germany -United Kingdom 2,475 8 France -United States 2,161 9 Germany - Poland 2, Germany - Sweden 1,833 Top Bandwidth Routes for Europe

17 Europe Traffic Flows European International Internet Bandwidth by Region Region Gbps Percentage Africa 1,235 2% Asia 5,599 7% Europe 60,066 79% Latin America 72 0% U.S. & Canada 8,949 12% Total Europe 75, % Synopsis: While the U.S. remains a prominent hub of interregional Internet traffic, Europe now hosts a vibrant IP transit market in its own right, attracting international buyers from Africa, the Middle East, and Asia. As in North America, prices in Europe continued to decline over the past year, but at a more moderate rate than the longer term trend. Carriers dropped prices for full 10 GigE ports an average of 14 percent across the region between Q and Q2 2013, and 29 percent compounded annually since The lowest 10 GigE prices quoted in Europe were found in hubs such as Frankfurt and London at $0.49 per Mbps. Prices have become uniform among major hubs in western, northern, eastern, and southern Europe. The rate of annual price declines ranged from 31 percent in Madrid to 37 percent in Amsterdam and Copenhagen.

18 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

19 South Asia main cables snapshot Submarine Network Name RFS Year Length (km) Lit Capacity (Gbps) Max Capacity (Gbps) Australia-Singapore Cable (ASC)* APX-West* Asia Pacific Gateway (APG)* Southeast Asia Japan Cable (SJC) GBICS/MENA Cable System Asia Submarine-cable Express (ASE)/Cahaya Malaysia Dhiraagu Cable Network Europe India Gateway (EIG) IMEWE PGASCOM Tata TGN-Intra Asia (TGN-IA) Asia-America Gateway (AAG) Cable System Batam Dumai Melaka (BDM) Cable System JAKABARE SEACOM/Tata TGN-Eurasia Matrix Cable System WARF Submarine Cable Dhiraagu-SLT Submarine Cable Network FLAG FALCON Transworld (TW1) Bharat Lanka Cable System SeaMeWe Tata TGN-Tata Indicom EAC-C2C i2i Cable Network (i2icn) SAFE APCN SeaMeWe FLAG Europe-Asia (FEA) *Proposed Cables

20 South Asia cables South Asia derives most of its international bandwidth through submarine cables. These cables provide both intra-asia connectivity and links to the United States and Europe. Between 2008 and 2012, the lit capacity of intra-asia submarine cables increased at a compounded annual growth rate of 28 percent, from 5.4 Tbps to 14.4 Tbps India, which has exhibited some of the largest bandwidth growth rates in Asia, saw rapid price declines over the past year. Between 2011 and 2012, the median monthly STM-1 lease price for Mumbai Singapore fell 43 percent to $11,000 and 39 percent compounded annually since Chennai-Singapore saw prices decrease 24 percent over the past year to $15,000 and 43 percent compounded annually since These sharp reductions continue to narrow the price discrepancies between eastern and southern Asia. Mumbai-Singapore is now only 2.8 times the price of a connection on Hong Kong-Singapore, compared to 4.5 times in Q Similarly, Chennai Singapore is now 4.7 times as expensive as Hong Kong-Tokyo, compared to 11 times in 2009 Price erosion between India and East Asia is enabled by the relatively low incremental cost of supply available on the i2i Cable Network, TGN-Tata Indicom Cable, and SeaMeWe-4, as well as by growing competition between service providers

21 South Asia Bandwidth Consumption and Proposed Cables China was the largest consumer of international bandwidth in South Asia, followed by Japan and Singapore coming in third The intra-asian bandwidth market is characterized primarily by submarine cable capacity and includes routes between both mature and developing markets. Key cities such as Tokyo, Hong Kong, and Singapore have long been hubs where carrier networks interconnect, while growing cities in India and South Asia are becoming more competitive as service providers extend to them a greater level of international connectivity Cable upgrades and an increased amount of competition have resulted in price erosion throughout the region in Wavelength prices on major routes saw significant reductions, falling an average of 33 percent between 2011 and 2012 and ranging from $23,250 on Hong Kong-Tokyo to $185,000 on Mumbai- Singapore. Two major intra-asia systems are slated to enter service by 2014: the Southeast Asia Japan Cable (SJC) and Asia Pacific Gateway (APG) consortium cables. These systems will have similar designs to the TGN-IA cable, which utilizes a trunk-and-branch configuration as opposed to the ring structure used in the previous generation of systems. Several Asian carriers and Google built the 8,900-kilometer SJC system. The cable links Brunei, China, Japan, the Philippines, and Singapore. SJC was launched in June 2013 at a cost of approximately $400 million. The APG cable, which is being built by a consortium of eleven Asian carriers and Facebook, will connect China, Hong Kong, Japan, South Korea, Malaysia, Taiwan, Thailand, Vietnam, and Singapore. The cable will cover 10,400 kilometers and is expected to enter service in the third quarter of Rank Country CAGR 1 China 3, , % 2 Japan 3, , % 3 Singapore 1, , % 4 Hong Kong 1, , % 5 Taiwan , % 6 India , % 7 Korea, Rep % 8 Malaysia % 9 Philippines % 10 Vietnam % Subsea Cable APCN-2 3,840 3,840 FLAG/REACH North Asia Loop 2,660 3,780 EAC-C2C 2,820 3,260 Tata TGN-Intra Asia 1,900 1,900 Asia Submarine-cable Express (ASE) 800 FLAG Europe-Asia SeaMeWe Total Intra-Asia 12,060 14,430 APCN International Internet Bandwidth Top Intra Asian Bandwidth Routes

22 Asia Pacific main cables snapshot Max Length Lit Capacity Capacity Submarine Network Name RFS Year (km) (Gbps) (Gbps) Australia-Singapore Cable (ASC) APX-East Hawaiki Cable APX-West Asia Pacific Gateway (APG) Solomons Oceanic Cable Network Southeast Asia Japan Cable (SJC) Interchange Cable Network (ICN) Tonga Cable GBICS / MENA Cable System Asia Submarine-cable Express (ASE)/Cahaya Malaysia Dhiraagu Cable Network Europe India Gateway (EIG) IMEWE Honotua PGASCOM HANTRU1 Cable System Tata TGN-Intra Asia (TGN-IA) Asia-America Gateway (AAG) Cable System American Samoa-Hawaii (ASH) SEACOM/Tata TGN-Eurasia Pipe Pacific Cable-1 (PPC-1) Matrix Cable System Telstra Endeavour Gondwana WARF Submarine Cable Dhiraagu-SLT Submarine Cable Network Batam-Rengit Cable System (BRCS) Max Length Lit Capacity Capacity Submarine Network Name RFS Year (km) (Gbps) (Gbps) FLAG FALCON Transworld (TW1) Bharat Lanka Cable System Australia-Papua New Guinea-2 (APNG-2) SeaMeWe Tata TGN-Tata Indicom Thailand-Indonesia-Singapore (TIS) EAC-C2C i2i Cable Network (i2icn) SAFE APCN Australia-Japan Cable (AJC) Southern Cross Cable Network (SCCN) SeaMeWe SeaMeWe FLAG Europe-Asia (FEA) *Proposed Cables

23 Asia Pacific cables Lit capacity on submarine cables connected to Australia rose in 2012, after remaining constant from 2010 to Southern Cross, already the largest cable by lit capacity in the sub region, has upgraded its network in several phases The Australia-Japan Cable (AJC) doubled its lit capacity to 640 Gbps by upgrading to 40 Gbps technology Pipe Pacific Cable-1 (PPC-1), which currently has a lit capacity of 200 Gbps, plans to upgrade the system with 100 Gbps technology, which will dramatically increase the cable s lit capacity to 3 Tbps. Even with the flurry of upgrades, the Australia & Pacific subregion is a hotbed of potential new submarine cables. There is strong interest in an additional cable from western Australia to Southeast Asia since only SeaMeWe-3 connects these two regions. The western coast of Australia is home to two similar but unrelated cable projects: Australia Singapore Cable (ASC) and APX-West. ASC hopes to enters service by Q APX-West was announced at the beginning of 2013 and would connect Perth, Jakarta, and Singapore. APX-West has a target in-service date of Q Even with strong interest adding diversity to this route, there is likely not enough demand to support more than one new cable on the route Trident Subsea Cable hopes to link western Australia to Singapore via Indonesia by Q Trident plans to interconnect with existing dark fiber pairs on the Matrix Cable to create a seamless link. Both APX-East and Hawaiki hope to enter service in 2015, and aim to connect Sydney, Auckland, Hawaii, and the west coast of the United States. Hawaiki also plans to install several branching units to enabling future connections to various South Pacific islands. In addition to APX-East and Hawaiki s plans to connect Australia and New Zealand across the Tasman sea, one other project is focused purely on the trans- Tasman route. The Tasman Global Access (TGA) cable, announced in February of 2013, would connect Sydney and Auckland. Funded by Telecom New Zealand, Telstra, and Vodafone, the cable is expected to enter service in The prospects for the TGA cable going forward appear positive since all three owners have significant capacity needs on their own, decreasing the need for outside capacity sales to help fund the system.

24 Asia Pacific Pricing Growing international bandwidth demand between Australia, New Zealand, and the U.S. has been fulfilled primarily through capacity upgrades to existing systems Price reductions reflect integration of newer transmission equipment and a declining cost of incremental capacity. Nevertheless, geographic isolation, distance, and the relatively small number of providers that offer international capacity between the countries still keep prices high and the observed rate of decline less than on other submarine cable routes

25 South Asia and Asia Pacific Traffic Flows Outlook Asian: The outlook for bandwidth prices on intra-asian routes portends steep decline Demand is robust and shifting towards higher capacities, evidenced by the number of system upgrades and the number of planned cables in development On routes where new builds and upgrades are both undertaken, price declines will likely be more rapid, similar to what was seen in 2012 Construction of new intra-asian cables does not reflect a pending capacity shortage on existing cables. Rather, it shows that providers are increasingly interested in owning their own capacity directly instead of incrementally buying it in the wholesale market. This is evidenced in the shift towards consortium cables, which allow carriers to achieve diversity and take advantage of current low unit costs. Capacity owners on existing cable systems will likely price match their competitors, furthering price declines into 2013 and beyond Asia Pacific: Price declines have been enabled by the lower unit costs that continued capacity upgrades to cables linking to Australia over the past few years brought With bandwidth demand continuing to grow, further upgrades to current systems connecting Australia to Asia and the U.S. are underway. Between the U.S. and Australia price declines will remain more moderate than other submarine cable routes until a new cable system is constructed, and greater competition is introduced.

26 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

27 Planned Submarine Cables Region/Cable Name Owner(s) Construction Cost (millions USD) RFS Length Capacity (Initial/Potential)Landing Countries Supplier Sub-Saharan Africa South Atlantic Cable System (SACS) Angola Cables n.a. Q , Gbps/40 TbpsAngola, Brazil n.a. South Atlantic Marine System (SAMS) SEACOM n.a. Q ,500 n.a.south Africa n.a. TechTeleData (TTD) Cable TechTeleData n.a. Q ,500 n.a.south Africa n.a. Europe-Asia SeaMeWe-5 Consortium n.a n.a. n.a.n.a. n.a. Asia Africa Europe (AAE)-1 Consortium n.a. Q n.a. n.a.n.a. n.a. Asia Malaysia-Cambodia-Thailand Cable Ezecom, Telekom Malaysia $ ,425 n.a.cambodia, Malaysia, Thailand n.a. Asia Pacific Gateway (APG) Consortium $500Q ,400 China, Hong Kong, Japan, Korea, Rep., Malaysia, Singapore, Taiwan, n.a./54.8 TbpsThailand, Vietnam India, Malaysia, Oman, Sri Lanka, Bay of Bengal Gateway Consortium n.a ,000 n.a. UAE Trans-Atlantic NEC Alcatel Hibernia Express Hibernia Networks $ ,600 n.a./25.6 TbpsCanada, United Kingdom TE Subcom Emerald Express Emerald Networks $ ,200 n.a./40 TbpsIceland, Ireland, United States TE Subcom Trans-Pacific China, Korea, Rep., Japan, Taiwan, New Cross Pacific (NCP) Cable System Consortium n.a. Q ,000 n.a. United States n.a. Australia and South Pacific January Interchange Cable Network (ICN) Interchange Holdings, Nambawan Super, Vanuatu Post $ , Mbps/3.2 TbpsFiji, Vanuatu Alcatel Australia-Singapore Cable (ASC) ASC International $160 March ,800 n.a./24 TbpsAustralia, Indonesia, Singapore Alcatel Tasman Global Access (TGA) Cable Telecom New Zealand, Telstra, Vodafone $ ,300 n.a./30 TbpsAustralia, New Zealand n.a.

28 Planned Submarine Cables Region/Cable Name Owner(s) Construction Cost (millions USD) RFS Length Capacity (Initial/Potential)Landing Countries Supplier APX-West SubPartners, Indosat $200Q ,600 n.a./32 TbpsAustralia, Indonesia, Singapore TE Subcom APX-East SubPartners $300Q ,500 n.a./19.2 TbpsAustralia, New Zealand, United States TE Subcom Hawaiki Hawaiki Cable Limited $350Q ,200 n.a./20 TbpsAustralia, New Zealand, United States TE Subcom Australia, Indonesia, Singapore (via fiber pairs on Trident Subsea Cable Trident Subsea Cable $400Q n.a. n.a./16 TbpsMatrix Cable System) Latin America and Caribbean Brazil, Colombia, Dominican Republic, Guatemala, America Movil Submarine Cable System-1 (AMX-1) America Movil $1,100 Jul-09 17,500 n.a./50 TbpsMexico, United States n.a. Alcatel Pacific Caribbean Cable System (PCCS) Consortium n.a. Q ,000 Aruba, Ecuador, Panama, Puerto Rico, United States, n.a./80 TbpsU.K. Virgin Islands Alcatel Polaris LinkBermuda n.a. Q n.a. n.a.bermuda, Canada n.a. Seabras-1 Seaborn Networks n.a. Q ,500 n.a./40 TbpsBrazil, United States Alcatel Cable of the Americas Angola Cables n.a ,900 n.a./20 GbpsBrazil, United States n.a. Mediterranean Algeria-Spain Algerie Telecom n.a n.a.algeria, Spain n.a. April Didon Orange Tunisia, Tunisiana $ n.a.italy, Tunisia Alcatel Other Arctic Fibre Arctic Fibre, Inc. $640Q , Tbps/32 TbpsCanada, Japan, United Kingdom, United States n.a. Russian Optical Trans-Arctic Cable System (ROTACS) Polarnet $980Q ,373 n.a./60 TbpsJapan, Russia, United Kingdom TE Subcom

29 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

30 Africa: Virgin Market The continent of Africa is the world's second largest continent after Asia. Africa is home tosix of the ten fastestgrowing countries in the world The projected economy growth rate of 5.3% next year, from 4.8% in Spending time on the internet could add US$300Billion to the economy by 2025 More than 720million have mobile phones. 167million already use the internet 52 million are already on Facebook Internet penetration is low at 16% of the one billion people on the continent. Source McKinsey & Co.

31 Neutral Infrastructure Operator Agnostic Cable System Transit Landing Stations

32 Table of Contents 1. MENA Region 2. Africa 3. Europe 4. South Asia and Asia Pacific 5. Planned Submarine Cables 6. The Opportunities 7. Appendix A -Maps

33 Appendix A -Maps MENA

34 Appendix A -Maps AFRICA

35 Appendix A -Maps EUROPE

36 Appendix A -Maps SOUTH ASIA/FAR EAST

37 Appendix A -Maps AUSTRALIA

38 The Naked Truth about Submarine Cables! By Amr Eid Chief Commercial Officer