ANALYSIS: Revenue sharing model brings alternate route to the Middle East

14 November 2014 | Kavit Majithia

Numerous projects have tried and failed to establish an alternative terrestrial route for traffic between Europe and the Middle East that avoids the Suez Canal. But has the Alternative Middle East & European Route (AMEER) finally navigated its way successfully round the region’s political hurdles, by means of an innovative new consortium model?

Stretching from Frankfurt to Dubai, via Turkey, Palestine, Jordan and Saudi Arabia, the route is said to offer lower latency than existing routes on the market and is fully redundant, by means of an alternate subsea cable leg via Italy.

The project has been spearheaded by Türk Telekom International (TTI), which has brought together a consortium comprising Paltel in Palestine, Jordan Telecom, ITC in Saudi Arabia and du in the UAE.

To be clear: this is not a new route in the truest meaning of the word. Instead it utilises existing networks.

“It’s a commercial agreement with interlocks and overlaps across existing networks,” explained Stuart Evers, CSO, TTI.

The project builds on an existing agreement made by Pantel – which was acquired by TTI in 2010 – to establish international connectivity for Paltel. TTI then identified potential partners to establish the remainder of the route, and by August of this year had commercially launched the venture.

“The project came about gradually. We had been looking into a consortium model as building new networks is not always the most efficient in terms of payback on investment,” said Evers. “We are using existing quality reliable networks that are proven and tested, which gives the technical confidence that you sometimes lack in new routes. It has also taken months rather than years to deploy.”

Another key factor in the speedy execution of the project is its unique revenue-sharing model, in which all parties benefit regardless of which sells capacity. “There is a set price list and therefore none of the price erosion you see on subsea cable consortiums,” said Evers.

Evers claims the route offers a round-trip delay from the datamena facility in the UAE to Frankfurt of 101 milliseconds, beating competing routes by 20-30 milliseconds. For this, there is a “slight premium”, and the route is a natural fit for carriers looking to support enterprises in time-sensitive verticals such as finance or media.