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NYTIMES: New undersea cable projects face some old problems

  • From: Suresh Ramasubramanian
  • Date: Mon May 10 09:40:54 2004

[about new cables laid by FLAG and SEA-ME-WE-4]

suresh ramasubramanian gpg EDEDEFB9
manager, security and antispam operations, outblaze ltd
 New Undersea Cable Projects Face Some Old Problems By KEN BELSON

Published: May 10, 2004

It has been several years since executives in the undersea cable
industry had anything to cheer about. Nearly every company that
strings fiber optics across oceans has been restructured or has gone
bankrupt. Lease prices for cable lines have collapsed and are still
falling. Bankers pulled the plug on most new projects long ago
because so much cable was already sitting at the bottom of the ocean.

The projects - the Falcon cable financed privately by Flag Telecom
and the Sea-Me-We 4 line built by a consortium of global telephone
companies led by Singapore Telecommunications - are nothing if not

But the operators of the new cable lines face the same problems that
sank many competitors. Chief among them is that the amount of
capacity being added far outpaces growth in Internet use and demand
for long-haul lines. Until this changes, prices will slide, making it

Mr. Rawle also expects demand for data links from countries in the
Indian Ocean, Persian Gulf and Red Sea to the rest of the world to
increase 38 percent a year on average through 2013. The problem is

"If you're a buyer, that's the side you want to be on," said David W.
Dorman, the chairman and chief executive of AT&T, which has not built
undersea cables since 1999. "Any time I hear someone is going to
build another cable, we go, 'Bravo.' " But Mr. Dorman added that as a
business proposition, "I wouldn't be putting any new cable into the
ocean right now."

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