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January 16, 2018

India’s Reliance Communications has plans for $600 million subsea cable

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Reliance Communications (RCom) announced plans to lay a 68,000-km undersea cable, estimated to cost $600 million, to carry data across Europe and Asia. 

Per multiple media reports, the system, which will connect its base in India with Italy to the West and Hong Kong on the East, is expected to treble the revenues in five years for its wholly-owned subsidiary Global Cloud Exchange, which is laying the cable. The cable, projected to be operational by the third quarter of 2020, will have  revenue potential of $1 billion per year, RCom Chief Executive Bill Barney told reporters.

The new cable, which was described as being able to reach more than “75% cent of the youth in the globe,”  will increase RCom’s capacity tenfold. The financing will come from partners, which at this point number six, including Alibaba, that account for $300 million. The investor fold could increase to as many as 30. Barney said that RCom expects to get over $700 million through such pre-sales as against the cost of $600 million.

The reports that RCom, saddled by debt, has struggled in recent years, recently exited its consumer-facing wireless business to focus on the enterprise segment.

Barney said the company expects a spurt in IT and telecom activity in the country over the next five to ten years, due to which it is betting on the cable business.
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