Capacity Watch

Beijing, October 13, 2011 -- China Telecom and Orange yesterday signed a strategic partnership framework agreement in Beijing in order to make the most of the complementary aspects of their networks and services. Mr.Stéphane Richard, Chairman and CEO of France Telecom-Orange, and Mr. WANG Xiaochu, Chairman of China Telecom executed the agreement.  The new partnership may signal that Orange has abandoned its former Chinese partner, China Unicom.

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In the recent Asian Carriers' Conference 2011 (ACC 2011) in Cebu, the Philippines, KDDI promoted its aggressive offers and solutions over the Russia-Japan Cable Network (RJCN) and the Transit Europe-Asia (TEA) cable system. The IPLC/IEPL price over TEA cable system will go down significantly. The other providers offering Transit Europe-Asia solutions over the TEA cable system and the ERA cable system may have to adjust their prices.

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According to Taipei news, the National Communications Commission (NCC)  announced Wednesday that it has approved the Kinmen-Xiamen submarine cable project to be jointly invested by Chunghwa Telecom (CHT) and three mailand operators, China Telecom, China Unicom, and China Mobile.

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In the recent 2011 China Communications Industry Development Forum held in Beijing on August 8, 2011, Mr. Lu Xiangdong, vice president of China Mobile Group said China Mobile should make every effort to participate in the construction of international submarine cable systems. As reported, China Mobile has joined the SJC consortium and the APG consortium to invest on the intra-Asia submarine cable systems, and also participated in the construction of the TSE-1 and the Xiamen-Jinmen submarine cables across the Taiwan Strait.

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While the telecom industry is astonished by the announcement on April 11, 2011 that Level3 is going to acquire Global Crossing, and chating about its impacts on the industry, and analyst expecting that there should be acquisitions and mergings of the other operators so as to form considerable competitive advantages against the Levels and Global Crossing merger, it is coming the acquisition of Savvis by CenturyLink.

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April 11, 2011, US time, Level 3 Communications, Inc. (NASDAQ:  LVLT) and Global Crossing Limited (NASDAQ:  GLBC) today announced that they have entered into a definitive agreement under which Level 3 will acquire Global Crossing in a tax-free, stock-for-stock transaction. The combined company will operate a unique global services platform anchored by fiber optic networks on three continents, connected by extensive undersea facilities. The combined network will serve a worldwide customer set with owned network in more than 50 countries and connections to more than 70 countries. This transaction will create a company with pro forma combined 2010 revenues of $6.26 billion and pro forma combined 2010 Adjusted EBITDA of $1.27 billion before synergies and $1.57 billion after expected synergies.

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Submarine networks have demonstrated its importance for global communications, especially global internet which requires huge capacity. On the other hand, the whole submarine networks are still quite vulnerable, though there is increasing enhancement on diversity, redundancy and protection. Submarine cable cut occurs from time to time arround the world. Trawl fishing, vessel anchoring, nature disaster such as earthquake, typhoon and landslide are the main threats to the submarine networks.

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On Tuesday December 26, 2006 at 12:25 UTC (20:25 local time), a maganitude 7.0 earthquake struck off the southwest coast of Taiwan, approximately 22.8 km west southwest of Hengchun, Pingtung County, Taiwan (the 2006 Hengchun/Taiwan earthquake). Eight submarine cables were cut after the earthquake and its aftershocks, catastrophically disrupted Internet services in Asia, affecting many Asian countries. Financial transactions, particularly in the foreign exchange market were seriously affected as well. The 2006 Taiwan Earthquak renderred significant impacts on submarine networks.

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In January-February 2008, multiple submarine cable cuts occured in the Persian Gulf and the Mediterranean regions. The cable cuts caused internet disruptions and slowdowns, affecting at least 60 million users in India, 12 million in Pakistan, six million in Egypt and 4.7 million in Saudi Arabia. The cable cuts  called into doubt the safety of the undersea portion of the Internet cable system.

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