GBI: Gateway to the Gulf
Company Strategy

GBI: Gateway to the Gulf

When the Gulf Bridge International cable system goes live later this summer, the Gulf states will for the first time be completely linked through one private Middle Eastern cable operator. Alex Hawkes investigates its potential impact on the region.

Investment has been rife in the Middle Eastern telecoms sector in recent years and if there is any sure sign that it is set to continue then look no further than the imminent launch of the Gulf Bridge International (GBI) cable system.

The concept for the company was developed during the height of the financial crisis in March 2009, but still managed to secure approximately $500 million of funding through the sovereign wealth funds of Qatar and Kuwait. With such solid financial backing, GBI was incorporated in December 2009 with the aim of deploying 4,750km of submarine cable configured in a ring in the Gulf. The completed project aims to offer double landings in Qatar and the UAE, with branched landings in Iraq, Kuwait, the Kingdom of Saudi Arabia, Bahrain and Oman. In short, all of the Gulf countries for the first time will be entirely linked through one submarine cable system.

“The idea behind GBI is to provide a new cable using the latest technology run by people from the region for the people of the region,” says Mohamed Elagazy, SVP of strategy, business development and international relations at GBI.

“There is commercial, strategic and political thinking behind the launch of this system. The Gulf countries need to be connected to one another and this will help develop intra-regional traffic flow.”

From east to west

As well as focussing on intra-regional traffic, the GBI system aims to develop links to major hubs in Europe and Asia to connect the world to the Gulf. The cable system will extend westwards to Mazara in Sicily, offering a gateway for Middle Eastern operators to Europe and the US. At the time of going to press, the cable had already been deployed in the Mediterranean Sea and portions of the Red Sea, while GBI management was also exploring opportunities of extending the cable further to Milan.

Over on the east side, the cable system will head into India, where GBI has selected Sify as its landing party in Mumbai. Elagazy also exclusively reveals to Capacity that GBI is researching the possibility of extending this link on to Singapore. “Five years ago most traffic went via Europe, but lately there is a trend towards traffic heading east. In Saudi Arabia, for instance, 90% of traffic from the country used to go via London or Paris and on to the US through transatlantic routes. Last year, however, 22% of traffic from the country went east via Singapore or Hong Kong and on to the US via its west coast,” says Elagazy.

“This eastern route has traditionally been more expensive which is why the western route has remained more popular, but prices are dropping on a yearly basis making it more of an attractive route.”

GBI expects to make an announcement on its Singapore plans in the coming months, and also has set a long-term target of establishing a route into Africa within the next two years. Trade relations between the Middle East and Africa have been particularly active in recent years, with Saudi Arabia, for instance, actively encouraging domestic food companies to invest in the continent in order to reduce local grain production and conserve water.

“The Gulf States are starting to invest heavily outside of their region and Africa is a key emerging market. However, in order for that to happen there is a real need to develop the infrastructure there – and not just roads and electricity, but telecoms is a huge factor too,” says Elagazy.

Benefits to the Gulf

For the time being, however, the initial impact of the launch of GBI will be found most readily in the Gulf countries. Although these countries are all united through their rich and vibrant Arabic culture, each is set to benefit in its own way from the increase in capacity in the region.

Perhaps the largest beneficiary will be Iraq. GBI will become the first cable operator to directly enter the country and the move marks a period of significant development to its telecoms infrastructure following the damage caused by years of serious trouble and unrest.

Despite being the most populated of the Gulf States, Iraq has the lowest mobile and internet penetration and the provision of new capacity into the country is widely expected to see this alter rapidly. The country’s telecoms infrastructure is owned by the Iraqi Telecommunications and Post Company (ITPC), a subsidiary of the Ministry of Communications, which has been making provisions for the country’s new international connections by deploying fibre-optic networks, constructing landing stations and providing backhaul. All it needs now is access to an international cable.

“There is a lack of capacity hindering the demand in Iraq,” says Elagazy. “Broadband and mobile prices are presently expensive in Iraq and the average Iraqi citizen cannot afford it. Once GBI introduces an affordable international gateway, these prices will certainly fall.”

Over in Qatar, there is a similar urgency for new capacity albeit for very different reasons. The country made a successful bid for the 2022 FIFA World Cup and has committed to investing approximately $40 billion in the necessary infrastructure to support the huge football event.

Attracting millions of football fans from all over the world, Qatar will also face a race to prepare its networks for the sudden influx of visitors.

“Qatar is investing heavily in its own infrastructure and not just for the World Cup. Its health, technology, education and media industries are expanding rapidly and these will also be heavily reliant on cable infrastructure,” says Elagazy.

Another key development emerging in the Middle East is the collective drive towards generating and hosting more internet content in the region (see the Roundtable on page 32). Government initiatives are encouraging content providers to the region, and according to Elagazy, the old model of moving all content and traffic between the region and the US simply needs to change.

“I don’t think this strategy of moving so much content and traffic between the region and the US can survive much longer. Already we are witnessing more intra-regional traffic, particularly between Qatar, Saudi Arabia and the UAE. This traffic will now also move through the GBI cable.”

Launch day

Deployment of the submarine cable began in December 2010, and at the time of going to press GBI had completed three cable landings: one in Fujairah in the UAE and two in Qatar. With seven landings left to complete in the Gulf, the period between now and launch day is critical. Considering the ongoing political and social unrest that has consumed large areas of the Middle East – with affected Gulf States including Bahrain and Yemen – keeping to the deployment schedule has proven a challenge.

“We have managed to avoid delays,” says Elagazy. “The route of the cable-deployment ship has been flexible and our technical team have done a fantastic job in avoiding the political hurdles going on in the region.”

The system is configured in what GBI describes as a ‘self-healing ring’. The company believes that this topology will provide greater protection from cable cuts and therefore minimise service disruption. “The water off the Gulf coast is shallow so it is not like laying cable in, say, the Atlantic. Laying the cable in a loop improves the efficiency and limits the risk of cable cuts. It gives us the reliability and resilience we need,” says Elagazy.

When it launches later this year, GBI’s network will have two fibre pairs through the Gulf, which will use the latest DWDM technology of 10Gbps wavelengths per fibre pair to achieve a total system design capacity of 2.56Tbps. The company has also partnered with SubCom to implement technologies such as dual-state repeaters and wavelength monitoring units. “The system is able to upgrade to 40Gbps if needs be, and we will most likely upgrade as we move forward. For the time being, however, we are very comfortable with the capacity we are offering to the region,” says Elagazy. “Our focus for now is to expand geographically.”

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