WCA September 2013

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56 Wire & Cable ASIA – September/October 2013
The 5,530-mile Southeast
Asia-Japan Cable (SJC)
undersea fibre system
goes live
As reported by International Data
Group (IDG), a 28tbps (terabits per
second) undersea fibre cable system
backed by a consortium including
the American Internet-services giant
Google, China Telecom, NEC and
a host of local telecommunications
companies, was opened on 27th June.
The 5,530-mile system connects
China, Hong Kong, the Philippines,
Singapore and Brunei with Japan.
An eventual link to Thailand could
bring its total length to 6,000 miles.
From Japan, according to Tokyo-
based NEC, its main supplier, the
Southeast Asia-Japan Cable (SJC)
system links to existing trans-Pacific
fibre that runs to the United States.
NEC said the system provides the
lowest-latency connection from
Singapore to Los Angeles.
The system is reported to consist
of six fibre pairs that can carry
the equivalent of 3 million HD
video streams at the same time.
Construction was started in April
2011 on the $400 million project, first
announced in 2009.
Jay Alabaster of the IDG News Service
wrote that most of the investors are
large telecom providers and mobile
operators in the countries that were
connected up. In addition to China
Telecom and NEC, these include
China Mobile, Hong Kong’s Donghwa
Telecom, Globe (in the Philippines),
SingTel, and TOT (in Thailand).
Mr Alabaster pointed out some
notable aspects of Google’s
participation. Its share in the project
could be used to link up three new
Asian data centres and connect them
to its US holdings.
In September 2011, Google acquired
1.6 million square feet of land in
Taiwan to construct a facility slated for
completion this year.
The American Internet-services giant
said it had also acquired smaller plots
in Hong Kong and Singapore with
the intention of building data centres
there, as well.
The new bandwidth could be used
to one day expand Google’s service
provider business. In the US, over the
last decade, the company purchased
large amounts of “dark” (unused) fibre
and recently launched fibre service in
several towns, offering 1Gbps Internet
as well as TV packages.
Rapid decline in copper-based
connections in Asia promotes the
advance of FTTx-based services —
the new ‘broadband darling’.
Copper-based broadband connec-
tions, while still the dominant method
of broadband access across the
globe, are in an accelerating decline,
according to a recent report from
Point Topic.
That is not surprising news, according
to Telecompetitor’s Bernie Arnason,
especially in the US “where the two
largest incumbent DSL providers,
Verizon and AT&T, have been
haemorrhaging millions of basic DSL
subscribers” for the past couple of
years.
Point Topic had reported that
copper-based broadband connec-
tions declined for the first time
in fourth-quarter 2012, with 415
thousand copper-based broadband
subscribers lost.
According to France Télécom strategy chief Élie Girard, the French phone
company is on the lookout for cable companies with which to cross-sell
services, offering European users packages combining TV, mobile and
Internet. The company sees an example in the relationship in the US between
Verizon Wireless and the cable company Comcast Corp whereby the firms
sell each other’s services under their own brand names.
In an interview with Mr Girard at the French Open in Paris, in June, Amy
Thomson of Bloomberg News learned that his company is seeking to expand
into increasingly popular multiservice bundles – a strategy adopted by its
competitors across Europe – without having to make expensive acquisitions.
Romania and Belgium, where France Télécom offers only mobile service, are
top venues for this type of relationship, Mr Girard said.
“When you look at the addressable market, it’s shrinking by several points
every year,” he told Ms Thomson. “You have this idea of trying to sign deals.
Look at what Comcast and Verizon have done. One needed mobile. One
needed fixed. So they cross-sold to each other.”
France Télécom already offers bundled packages in France and credits this
with helping it retain customers in the face of cheaper services, notably Free
brand mobile from Iliad SA. Still, as a price war initiated by Iliad last year
continues, France Télécom has pledged to cut costs to the customer.
The latest financial results have been disappointing. First-quarter earnings,
excluding interest, taxes, depreciation and amortisation, fell nine per cent
and sales dropped 5.9 per cent. The company cut its dividend last year and
is currently intent on conserving cash.
• Ms Thomson noted on Bloomberg.com (5th June) that the CEO of Britain’s
Vodafone Group, Vittorio Colao, also singles out the Comcast-Verizon
partnership as a model for European carriers as they confront declining
prices, weak economies and regulators who delay or reject acquisitions.
Vodafone has network-sharing agreements with Germany’s Deutsche
Telekom and Telefónica, of Spain.
As reported in June by the GSM Association (GSMA) and cited by Ms
Thomson, the average European consumer spent $38 per month in 2012 on
mobile subscriptions, compared with $69 for a US counterpart. The mobile
operators’ group also said that wireless phone bills in Europe have declined
steadily since 2000, while carriers in the US have reversed that trend
beginning in 2010.
With the Comcast-Verizon partnership as a model,
France Télécom mulls cross-selling deals with
cable companies