Global Crossing goes terrestrial with Pan European Crossing
By ROBERT PEASE
The growing demand for global Internet and communications connectivity has spawned yet another segment for Global Crossing`s worldwide fiber-optic telecommunications network. The Bermuda-based carrier`s carrier announced plans to construct the Pan European Crossing, a proposed terrestrial network that will connect major commercial centers of Europe with the rest of the world. The network will span 7200 km and deploy at least 24 fiber pairs to offer services, including transport of circuit and Internet Protocol (IP) voice, data, and Internet traffic.
In essence, Pan European Crossing extends Global Crossing`s undersea global network to 18 European cities, including London, Amsterdam, and Frankfurt, by a direct connection to the Atlantic Crossing (AC-1) segment. The landing points to AC-1 will be at Lands End, UK, and Beverwijk, Netherlands. AC-1 is scheduled for completion in January 1999; it already provides service between the United States and United Kingdom. This segment has been in service since May 26, 1998. Through AC-1, these European cities will have the benefit of 500,000 fiber-mi across the entire Global Crossing system.
The Pan European Crossing network will provide city-to-city connectivity in Europe, similar to what is currently provided in the United States through an April 1998 swap agreement with Qwest Telecommunications International Inc., a Denver-based company building a national fiber-optic network. The swap provides Global Crossing with connectivity between 25 U.S. cities, while providing capacity for Qwest on AC-1. Global Crossing`s goal is to eventually connect the world`s top 100 cities. With the 25 U.S. and 18 European cities connected through AC-1, Global Crossing is halfway to achieving its goal.
The other network segments of Global Crossing`s system are Pacific Crossing (PC-1) connecting the United States and Japan, scheduled for service in March 2000 with a fully redundant loop by July 2000; Mid-Atlantic Crossing (MAC) connecting the eastern United States, Bermuda, and the Caribbean, scheduled for service in December 1999; and Pan-American Crossing (PAC) connecting the western United States, Central America, and the Caribbean, scheduled for service in February 2000.
According to Global Crossing, Pan European Crossing takes advantage of opportunities created by the deregulation of Europe`s telecommunications markets. Telecommunications deregulation for much of Europe was mandated in January 1998, resulting in an explosion in communications traffic, particularly data and Internet applications. The result was a capacity shortage in which prices climbed as the demand increased. Now, the industry is scrambling to provide the transport capacity needed to put Europe on an even keel with the United States in terms of demand versus capacity.
"Currently, 90% of traffic is voice and 10% data," says Jack Scanlon, chief executive officer for Global Crossing. "The number is expected to flip by 2001 as Internet commerce grows, driving demand for high-capacity bandwidth."
In Europe, says Scanlon, the Internet is still making its presence known. On average the penetration is around 25% in Europe, as opposed to more than 40% in the United States. "Europe will catch up, and we want to be there to offer the services," adds Scanlon.
The capacity of Pan European Crossing comprises 24- to 72-pair fiber cables, mostly new builds, that will use dense wavelength-division multiplexing (DWDM) technology to put OC-192 (10 Gbits/sec) on each of 40 wavelengths. This would mean a 9600-Gbit/sec transport capacity on the 24-pair cables. Spare conduits will also be deployed to meet future capacity demands and technology advances. The cost of the project is estimated to be $700 million, with construction already underway and network operation scheduled for the fourth quarter of 1999.
Development of the new segment will involve several phases. Initially, connectivity will be provided between 13 European cities: London, Paris, Amsterdam, Rotterdam, Antwerp, Brussels, Hamburg, Hanover, Dusseldorf, Cologne, Frankfurt, Strasbourg, and Copenhagen. Extensions of the network are already planned to add Rome, Barcelona, Madrid, Berlin, Munich, Stuttgart, and Vienna.
"First, we get the rights of way, then contract with local contractors to actually dig the trenches," says Scanlon. "Finally, we place the fiber and electronics. We have the rights of way and will begin the contracting this month in the Netherlands."
Pan European Crossing network will feature the latest in Synchronous Digital Hierarchy (SDH) and DWDM technologies provided by multiple suppliers. It will be constructed in multiple network rings, providing diverse routing options and restoration or redundancy among all the points of presence on the network. Network capacity will be marketed to national and local, established and emerging, telecommunications operators.
"Back in 1997 when our financing was being put together, the banks did an analysis," says Scanlon. "They came to the conclusion that we would probably sell about $75 million in capacity on AC-1 by the time that system came on line. In actuality, by the time AC-1 was turned on this past May, we had sold $400 million, and by the time of our IPO this past August, we had sold $550 million in capacity. Prior to turning on our lines, like AC-1, we presell our circuit units, then going forward, we sell on demand. We`re changing the buying behavior of the industry."
Along with the announcement of Pan European Crossing, Global Crossing announced its intent to deploy a terrestrial network in Japan. Although the timeline was not available at press time, an announcement is expected before the end of 1998. Other regional possibilities exist throughout the global infrastructure, but future plans will be based on market and customer demands. As of press time, no suppliers had been announced for the project. q