Tokyo-May 18, 2011

Rostelecom and KDDI signed Agreement for upgrade and modification Russia-Japan Cable Network (RJCN) and Transit Europe-Asia (TEA) service in order to construct 10Gbps wavelength resources between Japan and Europe using shortest route via Russia.

The Agreement was signed by Vice-President Commercial Director of Rostelecom Mr. Pavel Zaytsev and Executive Director of KDDI Dr. Fumio Watanabe on April 18th in Beijing, China, during common visiting to Capacity China conference. Project includes upgrade and modernization of RJCN up to 640Gbps with respective capacity on Rostelecom's and KDDI's backbones and planning to be completed in 1Q 2012. After completing new type of service will be produced on RJCN and TEA as 10Gbps wavelengths between Tokyo and Europe based on usual monthly leasing model and also based on long term lease or IRU contracts up to 10 years. Parties common investment in the project is more than $60M during 2011-2012.

The project is driven by two reasons: first one it is expecting traffic growing between Japan and Europe in terms 2012-2014 focusing on using definitely very cost-effective 10Gbps transparent wavelengths instead of currently provided SDH ring protected capacity; second reason it is acknowledge of all Asian Carriers that TransRussia route must get more priority for Asia-Europe connectivity and back up route for US connectivity.

After signing ceremony Mr.Zaytsev comments: "In a frame of Rostelecom's national leadership carrier strategy we plan to focus attention on development our international services based on unique transit geographical position of Russia and already good-branded on International Market, and Transit Europe-Asia (TEA) is one of such service. Now we are extremely happy our good partner KDDI joint our idea and we have a chance to make new impulse in TransRussia transit route development which must be more and more demanded from both Japanese and Global market."

Also Dr.Watanabe added his opinion that: "Such project opens new page in KDDI international network and business strategy planning because we get real opportunity to make our planning on more than 10 years ahead based on TransRussia Europe-Japan transit and using highly demanded by network purpose transparent transit 10Gbps wavelengths with very reasonable commercial cost and technical parameters like latency and availability. Besides after happened earthquake and tsunami on east coast of Japan damaged a lot of submarine cables and destroyed network panning scheme we are happy to cooperate more with Rostelecom on development transit to Europe via RJCN and Russia which proved its stability and excellent quality for more than 2 years."

It is said, Rostelecom is working with China Telecom to upgrade the Transit Europe-Asia (TEA) via Mainland China terrestrial cable network, to offer capacity up to 10 Gbps over this alternative Europe-Asia route.

Source: KDDI