Internet cable problems: Telecoms competitors must work together

08 February 2008

Just days after severed cables in the Mediterranean disrupted phone and internet services in the Gulf, the region’s largest fixed-line operators agreed to build a high-capacity sub-sea cable, running from India to France through the Red Sea.

The cable, which will cost up to $400m, appeared to reveal the dynamism of the region’s operators in reacting to the disruption. The truth is somewhat different.

Saudi Telecom, Etisalat and Telecom Egypt, the three key regional companies funding the cable, had planned to start work on the project in late 2006. The cable was scheduled to start operating this year, but it is now unlikely to be finished until the end of 2009 at the earliest.

The delays were caused by changes to the companies in the consortium. Bharti Airtel, India’s largest telecoms operator, only came into the consortium recently and will now make one of the largest financial contributions to the project.

If they are to make voice and data traffic more secure, the big Middle East telecoms operators need to co-operate more on projects such as this.

However, this may be difficult at a time when competition is increasing in some countries. Etisalat’s entry into the Saudi mobile phone market in 2005 led to lower profits at Saudi Telecom.

Submarine cables are critical for the Middle East’s perception of itself as a centre of business and trade.

Just four sub-sea cables carry almost all of the region’s communications traffic. The much-welcome investment in a further cable should be the start, not the end, of an overhaul of telecoms infrastructure in the region.

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