03 January 2018
| Alan Burkitt-Gray
A cable from China to Europe and new investments in Mumbai are among GCX’s plans to set it apart from the troubled Indian mobile business. Alan Burkitt-Gray interviews GCX CEO Bill Barney
The international unit of Reliance Communications is
planning a new 100G subsea cable stretching from China to India
to Europe. The new cable, to be built by Global Cloud Xchange
(GCX), the international cloud and carrier unit that is owned
by the Indian telco, will be called Eagle and will be part of
the group’s Cloud and Fibre Initiative, announced
in November. It will be ready for service in 2020, says Bill
Barney, chairman and CEO of GCX, who is also CEO of Reliance
But at the same time RCom/GCX is recasting itself. It is
getting out of the troubled Indian mobile business, where
oversupply of operators has driven down prices to an
unsustainable level, and is focusing on enterprise
communications and data centres in the Indian market and subsea
cables in the global market.
GCX already has a global cable
network, but the oldest part of that is Flag –
originally Fibre-Optic Link Around the Globe – which
went into commercial service in 1997. "We’ve had
the largest capacity sales in our history this year,
particularly from India to the Middle East," says Barney. "And
from Europe we see an absolutely huge demand, particularly from
content players. It’s probably the best time in
our history to build this and fund it.
He’s confident that GCX will get the business,
comparing the sales performance on two of its previous cables:
Falcon, which links the Middle East and Egypt with India; and
Hawk, which connects Europe with the Middle East and
"For Falcon we were 130% oversub-scribed when we hit the
water. Hawk was 80% oversubscribed."
Hottest in decades
Over the next few years the subsea cable business is going
to be "the hottest it will be for the next few decades", he
adds. And that’s especially the case for a company
centred on India, which is seeing a booming demand for internet
access – thanks, in large part, to the arrival of
Reliance Jio. That’s not connected to RCom, except
that each is owned by a different son of the late Dhirubhai
Ambani. One, Anil Ambani, counts both RCom and GCX among his
operations. His older sibling, Mukesh Ambani, runs Reliance
Industries, which launched Jio in late 2016 with rates so low
they have caused carnage throughout India’s mobile
industry (see page 6).
"India is now the largest user of bandwidth in the world,"
says Barney. "It was fifth before the arrival of Jio, but
it’s now the largest. Nearly half the
world’s population is reachable within a short
distance from India’s borders, giving India a
strategic edge in the new digital era."
The new cable will be split into two parts: Eagle East,
running from Mumbai to Hong Kong, with a number of branches,
and Eagle West, running from Mumbai to Sicily via the Red Sea
"We will be fully operational on both legs by 2020, with our
customers pushing for an early date. These systems can be built
quickly these days." Eagle will have fewer landing stations
than Flag. That helps speed of delivery, he says: "Providing
power to each location can be a problem."
Who’s building it? "Vendors will be announced
when we’ve picked them," is all he’ll
say. "We’re in the process right now."
Eagle "will help triple the size of the company by the next
decade", says Barney. "It will create synergy with our existing
cables", because it will be easier to do restoration and
maintenance. "It means in three or four years we will have
duplication across all our cables."
Who’s going to use Eagle? GCX has two letters
of intent and three on the way, he says. He’s
aiming to have three to announce by the time of the Pacific
Telecommunications Council conference in Hawaii in late
Technology has advanced significantly since those cables of
the late 1990s and early 2000s. There were dot-com bankruptcies
and not much new investment. "Now we have new technology
players such as Ciena and Infinera, and a lot of the advances
come from the over-the-top [OTT] players," says Barney.
"They’re pushing to increase the bandwidth. Most
cables were sub-10G, but new cables are 10G and are
There are hotspots around the world that have lots of
capacity, and areas that don’t, he notes,
comparing the capacity available in Hong Kong with "the entire
Middle East". He also points to Turkey and eastern Europe as
areas with less capacity than they should have.
Better fibre connections to poorly connected places with
low-cost labour will help boost the service economy, he adds.
"The service economy will chase lower-cost labour –
and fibre and data centres will chase right behind."
That’s one reason fibre is going to India, the
Philippines and Latin America, he adds. "It’s the
human factors. Africa will open up as well, but Africa is
probably the last stop."
OTT providers have started to invest in subsea cable.
"They’re in a land-grab now," says Barney. But the
opportunity for them could be "fleeting" as new cables are
laid. "We’re seeing more and more video on our
platforms and that requires massive infrastructure investment."
This investment was always picked up by carriers in the past,
but will the content companies take it up? "It partly depends
on the US net neutrality rules," he says.
Meanwhile GCX continues to expand its footprint in that
other element of infrastructure that Barney knows is essential
to the new service economy: data centres.
The company, along with its investment partner, is planning
to announce its new Mumbai data centre project in early
January. It is, he says, "a world-class data centre" that
aligns with its recently announced Cloud and Fiber Initiative.
"This new facility will be a key India data centre hub with
direct connectivity into our planned Eagle express subsea cable
system," Barney added.
It’s not been officially announced so far
because of the challenges that are affecting all of Indian
mobile communications at the moment. GCX’s parent
company, RCom, is in the process of unwinding from the mobile
business to focus on the enterprise market. "We
didn’t want to make a lot of announcements while
we were going through the process with RCom," he says. "Many
people wouldn’t understand that we were two
businesses." But now "there is a lot more clarity in the
market", he adds. So what’s happening at RCom?
"It’s a restructuring exercise we’re
going through. It all started last year when Jio launched free
data. Since then four operators have exited the market. Anyone
with less than 15% market share is finding it difficult to
Before Jio came into the market, RCom’s
enterprise business, plus the data centre operation, plus GCX
accounted "for 15-20% of the entire company".
Now RCom is trying to sell off its towers, spectrum and
mobile activities, and Barney hopes that it will all be over by
March 2018. "The new company that will emerge from this is
GCX," he says.
Shift in the market
With its base in Mumbai on the west coast of India, GCX is
trying to shift the market away from Chennai, on the south-east
coast. "OTT companies were focused on Chennai," says
But Eagle and other investments mean Mumbai’s
fibre footprint will get much better. The new network will be
four/six fibre pair systems with initial design capacity of
12-24Tbps per fibre pair. Eagle East will be 7,750km long, with
landing points in Singapore and other branching units from
The Eagle West map shows a single link from Mumbai to Italy,
8,900km long, but GCX says there will be "diverse routing and
landing points within the Mediterr-anean and low latency subsea
routing from Europe to India and beyond".
The company claims that the new system will be the fastest
Mumbai-to-Hong Kong route, avoiding the outage-prone Malacca
Strait. In addition, GCX says Eagle will also be the fastest
submarine route between India and key technology centres across
the Middle East and Europe.
Barney says: "We’ve got our eyes on the
emerging markets, where there will be opportunities." For data
centres too, he hints. "If we were able to get into Riyadh or
Cairo we would look at it."
The Eagle investment and the yet-to-be-officially announced
Mumbai data centre investment are intended to mark a new start
for GCX and for a slimmed down, enterprise-focused
Meanwhile the carnage across the whole Indian mobile
industry continues. There have long been too many operators
competing for business, and Reliance Industries’
funding of Jio has focused minds on the need for
GCX and RCom’s enterprise business have a new
focus. Whether that ends years of sibling rivalry in the Ambani
family is a completely different question.