Du joins consortium to link UK to India

Osman Sultan displays the cross section of a submarine optic-fibre cable.

UAE telco du announced its investment in the US$700 million Europe India Gateway (EIG) submarine cable system, joining 15 other international operators in the consortium.

The 15,000 kilometre EIG cable system will be the first to connect Britain to India, and will include landing points in Portugal, Gibraltar, Morocco, Monaco, France, Libya, Egypt, Saudi Arabia, Djibouti, Oman and the UAE.

Spanning three continents, the cable is expected to significantly enhance capacity between the countries involved, providing up to 3.84 terabits per second (Tbps), which is the same capacity as all the UAE’s 4.5m residents using the line simultaneously.

Du CEO Osman Sultan said the cable system would add options to the country’s existing telecoms facilities through an additional landing station in Fujairah, on the UAE’s eastern coast. “The project will bring resilience and diversity to du’s network and position the UAE as a regional business destination with broadband capacity feeding into the country through diverse entry and exit points,” Sultan stated.

The cable development will help safeguard the region’s telecommunications systems from a natural disaster or if existing cables were cut again, by diverting traffic. Du’s contribution of US$50m is part of an effort to help develop the UAE as a hub for regional telecoms services. Other telcos to contribute to the project include AT&T, Bharti Airtel, BT, C&W, Djibouti Telecom, Gibtelecom (Gibraltar), IAM (Maroc Telecom), Libyan Post Telecom and Information Technology Company, Mauritius Telecom, MTN Group, Omantel, PT Comunicações (Portugal Telecom), Saudi Telecom Company, Telecom Egypt, Telkom, and Verizon Business.

The high-bandwidth optical-fibre submarine cable is set to be operational in the second quarter of 2010. It will also provide
interconnection with other major cable systems connecting Europe, Africa, Asia and North America, and will complement existing high-bandwidth cable systems carrying broadband traffic from Europe to India.

The announcement from the UAE’s second operator came days after it released its first quarter results for the period to end-March, which showed du’s revenues increased by 18 per cent quarter-
on-quarter to AED756.5m (US$205.9m). This was up 313 per cent year-on-year.

Du reported subscriber numbers reached more than 1.75m at the end of March, though the telco acknowledged that 20 per cent of its subscriber base is inactive.

The UAE’s Telecommunications Regulatory Authority requires operators to release figures of active subscribers in line with international definitions, representing subscribers who have concluded a billable action in the three months prior to when the subscriber numbers were correlated.

Despite the significant percentage of inactive subscribers, Sultan said he was pleased with the telco’s addition of more than 1.4m active customers. “We are on track to achieve our target market share of 30 per cent earlier than the declared three years, as can be seen by the excellent growth of our customer base and the performance of our company,” said Sultan.

Du also recorded EBITDA of AED1.6m for the quarter, compared
to a negative AED79.2m in Q407. However, overall the operator recorded a loss of AED61.7m in Q108 compared with a loss of AED146.6m incurred in Q407. The telco continued its capital expenditure programme covering both the fixed and mobile networks
and invested AED490.7m in the first quarter of this year.