Global Telephony / September 1996
By Larry Luxner
Even though it trails the United States and Europe in terms of phone-line density and modern telecom technology, South America could soon get not one, but two, state-of-the-art fiberoptic cables linking it with the rest of the world.
The first is the proposed $265 million Pan American Cable System, which will provide fiberoptic connections between Chile, Colombia, Ecuador, Panama, Peru, Venezuela and the U.S. Virgin Islands. The second is the $300 million transatlantic Columbus II, which will link Argentina and Brazil to Europe
TresCom International, which organized a recent three-day investors' meeting in Fort Lauderdale, Fla., says the Pan American cable will be up and running by early 1998.
"This is the first cable to the west coast of South America," said Ed Hamilton, TresCom's vice-president of development, in a phone interview. "From an economic perspective, it'll have a lower unit cost than providing the same capacity via satellite."
Hamilton declined to discuss the cable's exact routing, saying that depends on ocean studies now underway, but sources indicated it would begin in the Chilean coastal city of Arica, cut through the Isthmus of Panama and terminate on the northwest corner of St. Croix, where AT&T of the Virgin Islands is building a huge cable station. Some 80 companies are involved in the project, including AT&T, Aruba's Setar, Venezuela's CANTV, Antelecom of the Netherlands Antilles, Chile's Entel and Telefónica de España. Percentages of ownership in the planned cable will be determined at a data-gathering meeting in Curaçao later this month.
Hamilton said capacity on the fiberoptic cable will be 4,032 half or 2,016 full-bearer 64-kilobit channels, each full channel capable of carrying 30 simultaneous voice, fax and data transmissions. That translates into nearly 10 million calls a day.
"This particular cable is going to use a self-healing ring architecture, one of the relatively few cables with that feature built into it," he explained. "Basically it's a set of concentric rings, where the traffic will actually be sent in both directions. In the event there's a cut along the cable between two adjacent stations, the traffic will go around the ring in the other direction and reach its destination."
He added that the Pan American Cable will outwit sharks, which seem to be attracted to electromagnetic force. "When the cable is laid, it follows the topography of the ocean bottom. In cases where there's known shark activity, the cable is designed with a special fishbite protection."
A regional telecom executive familiar with TresCom said he doubts that the company -- which paid $19.5 million for St. Thomas-San Juan Telephone Co. several years ago -- will play a major role in the cable once it's up and running.
"It's not clear who's going to lay the cable, or who'll take ownership," said the executive, who asked not to be named. "They want to sizzle, but there's not much beef behind this."
Nevertheless, TresCom says Pan American is the eighth undersea cable network in the Southern Hemisphere in which it has ownership. The company, which claims a market capitalization of $150 million, also has interests in Americas I, Columbus II, Taino-Carib, Eastern Caribbean Fiber System, Trans Caribbean System I and two other cable systems.
TresCom, which Hamilton called "a small company making big inroads," is also involved in the Antillas I, a $30 million cable stretching between Puerto Rico and the Dominican Republic. Partners in that endeavor also include AT&T, MCI, Puerto Rico's Telefónica Larga Distancia and three Dominican companies: Codetel, Tricom and All America Cables & Radio.
Meanwhile, bids to construct the Columbus II transatlantic cable are to be announced later this year, though financial details on this project are less clear. Starting in Mar del Plata, Argentina, the $300 million cable is to join the Brazilian network in the northeast, then cross the Atlantic to Cape Verde and Senegal, making landfall in Portugal, where it'll be connected to European telecom networks. Brazil's Embratel and Argentina's Telintar will each have an 18% stake in the cable, followed by Portugal Telecom (10%) and smaller investments by Portugal's Marconi, Spain's Telefónica, France Telecom, Deutsche Telekom and phone companies in Italy and Cape Verde.
This new cable promises to boost telecom transmission capacity to Europe, because it will operate with the Americas I and Atlantic II cables, which already connect South America to the Caribbean, North America and Europe.