Global Cloud Xchange: Upgrading the Middle East
Global Cloud Xchange – formerly Reliance Globalcom – is one of the Middle East’s largest providers of subsea cable connectivity. Rory Cole, CFO of the company’s three business units, shares his views on the regional market with Capacity.
With a 35% market share in the Middle East, Global Cloud Xchange claims to be the largest provider of subsea cable connectivity in the region, largely via its FALCON cable, which has 15 landing points in the Gulf alone.
The company owns and operates 11 subsea cables across the globe and last December it upgraded its FA-1 subsea cable link, which spans the Atlantic Ocean from London and Paris to New York, with 100G technology.
Through a partnership with Ciena, the company is now able to deliver high-speed, low-latency 100GbE and OTN services between London, Paris and New York. Rory Cole, CFO of Global Cloud Xchange’s three business units, believes the upgrade is truly revolutionary.
“We are talking about changing the terminal equipment on the land; we are not changing any equipment in the water,” Cole stresses. “I don’t think the industry understands what this means.”
Cole explains that the problem with upgrading subsea cables has always been with the bandwidth and spacing of the repeaters at the bottom of the ocean when they were originally laid in the water.
Newly developed optical technology, such as that created by Ciena, means that subsea cable operators are able to notably enhance the available capacity and latency at a fraction of the time and price it would take to alter the cable itself.
“By just changing the terminal equipment, it is possible to have between four and eight times the capacity that you had as little as 18-24 months ago,” Cole explains. “It disrupts the economic model of building any new transatlantic cables – at least for the next three to four years – because we can upgrade ours for 10-15% of what it costs to build a new one.”
Cole believes that increasingly sophisticated optical technology is reducing the need for new subsea cable builds.
“We find it disturbing that there are people out there thinking there is a need to build another transatlantic cable,” Cole says.
The cost of building a new transatlantic cable typically falls in the region of $300 million or higher, says Cole. And he believes the chances of getting a significant return on such an investment are dwindling.
“Even on our oldest FEA cable we have been able to upgrade certain segments to 800G,” Cole comments.
Keeping in the loop
Operating subsea cables in the Middle East poses some unique challenges, says Cole.
“The Gulf is unique because of its loop architecture, which the serious operators have adopted,” Cole says.
This so-called “loop” architecture provides protection throughout a region which is prone to cable cuts, due to the enormous amount of shipping activity. Loop architecture alleviates this threat by providing an alternative route for traffic to pass through when cable cuts do occur.
The second unique factor about the Middle East, Cole says, is that consortium cables cannot land in every country in the region without significantly adding latency.
“When a consortium cable goes through the Middle East, it tends to land at two or a maximum of three places,” Cole says. Typically this includes Egypt, Saudi Arabia and Oman.
The final unique feature of the Middle East is its demand for data, largely driven by the successful deployment of 4G networks.
“The LTE networks in the Middle East have been phenomenally successful from a data demand perspective,” says Cole. “We have some customers in Saudi Arabia and we are always amazed at the amount of capacity required for their customer base.”