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RCom lays 68,000-km long undersea cable costing over $600 million

siliconreview RCom lays 68,000-km long undersea cable costing over $600 million

Reliance Communications led by Anil Ambani, after selling the spectrum to Mukhesh Ambani at an estimated cost of 23,000 crores, now plans to lay 68,000-km undersea cables at a cost of $600 million to carry data across Europe and Asia. This system with its base in India, will connect to Italy in the West and Hong Kong in the East and is expected to increase the revenue by three folds in five years, for its wholly-owned subsidiary Global Cloud Exchange.

Bill Barney, the chief executive of RCom, told the reporters that it is expected to be operational by the third quarter of 2020 and will have a potential revenue of $1 billion per year. The project will be financed by partners, whose numbers can go up to 30. He also added that the company expects to get over 700 million through such pre-sales. It has already partnered with six companies including Alibaba, for the cable and has been able to raise $300 million in commitments.

Burdened with the debt of 45,000 crore rupees, the company had exited the consumer-facing wireless business late last year, to focus on the enterprise segment.

 The size of the company, what is being called upon as the “new RCom” is much smaller but it is expected to be much leaner. Late last month, the company had sold its spectrum to elder brother-run Reliance Jio for an estimated Rs.23,000 crore which helped it come out of insolvency petitions and eventual liquidation.

Barney said the company expects a spurt in IT and telecom activity in the country over the next five to ten years, due to which it is betting on the cable business.

 

  

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