Digicel founder behind new telecom - Denis O'Brien main shareholder in Deep Blue Cable
Digicel Group founder and chairman Denis O'Brien holds the largest stake in Deep Blue Cable, the new entity that aims to string the region with underwater fibre-optic cables.
Deep Blue is not connected to Digicel, which has operations in the Caribbean, Central America and Pacific Islands.
"Deep Blue Cable and Digicel Group have a common shareholder, but Deep Blue Cable has its own management team and is separate and distinct from Digicel Group," said Deep Blue CEO Stephen Scott in response to Gleaner Business queries.
That confirmation comes after it formally announced plans to lay cables across the Caribbean earlier this month.
Digicel confirmed that O'Brien was the common shareholder and also the main owner.
Deep Blue aims to fill a gap in the high-stakes fibre cable market. The company foresees that roughly half of existing cable entities will have outdated or failing technology within a decade.
"The Deep Blue Cable will be ready for service in the first quarter of 2020," said Scott, adding that it takes around four to five years to deliver a sub-sea cable system.
The company plans to link a series of Caribbean countries and Miami, but has not disclosed the size of the investment it is making. However, given the rate of spend by Digicel on a past fibre-optic project, Deep Blue may be deploying more than US$100 million in the first phase of its project alone.
EYES ON OPERATING LIFE
Deep Blue explained that currently, there are 26 cable systems operating in the region, and of those, 11 are consortium systems. In 2020, there will be only 10 cable systems in service with greater than six years of useful life remaining, and two of them are consortium systems.
The company stated that submarine cables are finite assets with an effective, efficient operating life of around 25 years. Further, many buyers such as carriers and service operators, for example, mobile telephony and cable TV, plan capacity and reach looking long into the future, and for economic reasons often agree to 10 or 15-year indefeasible rights of use or IRU purchase terms. Deep Blue added that once a submarine cable system is more than 10 years old, it can no longer sell a 15-year IRU, and similarly, when it is more than 15 years old it can no longer sell a 10-year IRU.
"Without a new cable system by 2025, assuming the market grows at only 50 per cent of the anticipated rate, then there remains 10 cable systems with only three having 10 years or more useful life," the company said, adding that the 10 only land in seven of the 30 Caribbean countries.
EXPECTED GROWTH IN DEMAND
Deep Blue estimates the growth in regional telecom demand over the next 20 years at between 27 per cent and 48 per cent over the period, based on an independent study.
The entity said it will offer lower unit costs to clients as the implementation and installation costs are reduced.
"The operating costs are reduced given the opportunity to consolidate and outsource critical functions, for example, network operations centre services," Scott said.
Deep Blue Cable, formed in St Lucia, plans to develop and operate a fibre-optic cable network which will initially land in 12 countries, including Jamaica. The second phase of Deep Blue's development will grow the number of countries within its loop to 28 across the Caribbean and the Americas. Additionally, it plans to land the cable in select countries more than once, taking the number of landings to 40. For instance, it plans to land in Jamaica in five areas two in proximity to Kingston, two in proximity to Ocho Rios, and one landing in Montego Bay.
The main markets it wants to penetrate include Puerto Rico, which it calls a US$3-billion telecoms market opportunity, Dominican Republic at US$1.9 billion, Haiti at US$700 million, Trinidad at US$650 million, Jamaica at US$600 million, Cayman Islands at US$150 million, and Turks & Caicos at US$50 million.
The cable will initially span roughly 12,000km in the 12 markets, including the Cayman Islands, Curacao, the Dominican Republic, Haiti, Jamaica, Puerto Rico, Trinidad and Tobago, Turks & Caicos Islands and Florida in the United States. The technology deployed will include cable that has eight fibre pairs with an initial capacity of 6 terabytes per second, Tbps, and ultimate capacity of some 20Tbps per fibre pair.
Deep Blue will partner with TE SubCom to build the fibre-optic ring.
Large telecom provider CWC owns a sub-sea network that spans more than 48,000km with an additional 38,000km of terrestrial fibre, according to its website. Digicel Group holds over 3,000km of sub-sea cable in the region, which it either acquired or built, according to its website and reports.