World's Longest Undersea Fiber Cable
Commences Europe - Middle East - Asia Operations
- FLAG Fills Crucial Gap in International Wholesale Market -
December 9, 1997
LONDON and HONG KONG -- FLAG Limited and Bell Atlantic today
announced the launch into commercial service of the world's
longest undersea fiber-optic cable system -- the first of a
new generation of high-capacity undersea cables.
Known as FLAG (Fiberoptic Link Around the Globe), the system
is organized, designed and priced to compete in the rapidly
growing wholesale market for international telecommunications
FLAG is the longest man-made structure ever built, stretching
28,000 kilometers (17,000 miles) from the United Kingdom to Japan
and linking Europe and Asia by way of the Middle East.
"FLAG is the way for nearly three-quarters of the world to
participate in the digital revolution," said Frederic V. Salerno,
Bell Atlantic senior executive vice president for strategy and
corporate development and chief financial officer.
"As international calling and the World Wide Web become permanent
features of business and everyday life, FLAG offers carriers in
growing markets the ability to provide their customers -- often
for the first time -- an all-digital connection to the future."
With landing points in Japan, Korea, China (at Shanghai and Hong
Kong), Malaysia, Thailand, India, the United Arab Emirates, Egypt,
Italy, Spain and the United Kingdom, FLAG offers approximately 75
percent of the world's population access to a broadband superhighway
intended to meet the soaring demand for international communications
"Our customers' communications needs are stretching boundaries to
the point that there is little distinction between local and global
markets anymore," Salerno said. "Bell Atlantic is committed to meeting
those needs, and to participating in this new, worldwide communications
industry through projects such as FLAG."
Although trans-Atlantic and trans-Pacific cables have been built in
the past ten years, no capacity has been added along the critical
Europe-Middle East-Asia route until now. FLAG offers eight times
the capacity of the only other submarine cable directly connecting
Europe and Asia, as well as secure, reliable transmission to regions
previously dependent on satellites.
FLAG can transmit more than 10 gigabits of digital information per
second -- the equivalent of 600,000 simultaneous conversations --
over two fiber pairs. Further technical advances, including
Wavelength Division Multiplexing, give FLAG the potential to
double the capacity of most segments.
FLAG is the first major submarine cable system to be financed by
private investors rather than international carriers. As such,
FLAG is distinguished from traditional cable systems because its
services can be flexibly and responsively packaged and priced
for a competitive market.
Bell Atlantic is FLAG's largest single shareowner, holding
approximately 38 percent, and is managing sponsor. Other investors
in FLAG are:
- The Dallah Al-Baraka Group of Jeddah, Saudi Arabia, a diversified
multinational company which manages a $6 billion portfolio of
operations in more than 40 countries.
- Telecom Holding Co., Ltd., a wholly owned subsidiary of TelecomAsia,
the largest market-capitalized company on the stock exchange of Thailand.
- Marubeni Corp., one of Japan's leading general trading companies.
- The Asian Infrastructure Fund, a Hong Kong-based $1 billion fund
that invests in entities engaged in developing and operating
infrastructure projects in Asia.
- GE Capital Services, a diversified financial services company
wholly owned by General Electric Co. of the United States.
- Gulf Associates Inc., a New York-based investment firm with
extensive trade and project development ventures in the Middle East.
The wholesale market for international traffic is expected to
reach nearly $3 billion a year over the next 10 years. Driving
its growth is a 14 percent average annual jump in international
switched traffic -- and even higher growth rates for private line
traffic, which includes Internet volumes that have been doubling
each year for the past ten years. The Internet is already
accessed daily by an estimated 50 million people and is adding
10,000 new users each day.
"FLAG offers carriers a distinctive value proposition," said
Daniel C. Petri, acting chairman of FLAG Limited.
"The market for wholesale capacity is being reshaped by changes
in regulation and the emergence of competition in many countries,"
Petri said. "More than half of FLAG's landing party countries
have liberalized their communications markets, or are expected
to do so in the near future, and this is stimulating the
establishment of new carriers as well as growth in communications
"In this new environment, FLAG has several competitive advantages,"
Most important, FLAG offers carriers the benefits of digital fiber
capacity while allowing them to avoid up-front construction costs
previously associated with submarine cables.Under the traditional
system, carriers who need international capacity jointly fund the
cost of cable construction and commit to capacity well in advance
of actual use, making the funding requirements substantial and
In contrast, FLAG's construction was financed by private investors,
freeing carriers to purchase only the capacity they need, and only
when they need it. "FLAG's flexibility makes it attractive to
carriers that want to meet changing customer requirements quickly,"
FLAG goes into service with 66 international carriers as customers.
Petri said that while FLAG's initial customers are large carriers
and newly competitive carriers, other potential customers include
resellers of communications products and services and Internet
providers. Corporations and industries seeking to build global,
enterprise-wide networks also may use FLAG through appropriate
arrangements with licensed carriers.
Petri also noted that the successful engineering and construction
of FLAG will translate into superb reliability and customer care.
Bell Atlantic's Global Systems unit has received worldwide
recognition for its project management of FLAG in the form of ISO
9001 certification, one of the international business world's most
prestigious quality awards. FLAG construction was built on time
(in 27 months) and within budget, at a capitalized cost of
approximately $1.5 billion. And, unlike traditional cable systems,
the entire FLAG system is monitored continuously from a single
network operations center, which is located in the United Arab
Future plans for FLAG, Petri said, include full global connectivity
through appropriate agreements with other cable systems, as well
as additional landing points on the present route.
FLAG Limited, a Bermuda-based corporation, owns and operates FLAG,
the world's longest undersea fiber optic cable system. Linking Europe,
Asia and the Middle East with high-capacity digital services through
13 landing points in 11 countries, FLAG provides international
communications services to carriers in nations with some 75 percent
of the world's population.
The new Bell Atlantic -- formed through the merger of NYNEX and Bell
Atlantic -- and its companies are among the world's largest investors
in high-growth global communications markets, with operations and
investments in 21 countries. With more than 40 million telephone
access lines and 5.8 million wireless customers worldwide, Bell
Atlantic companies are premier providers of advanced wireline voice
and data services, market leaders in wireless services and the
world's largest publishers of directory information.
INTERNET USERS: Information on FLAG can be obtained over the World
Wide Web at http://www.flag.bm. Bell
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