Taipei Times: Asia Global Crossing Taiwan (AGC) was recently awarded the first international submarine cable license in Taiwan. When will AGC land its cable and how long will it take to roll out its services to end users?
Chian Feng (
TT: Who are AGC's local partners?
Chian: Equity wise, Microelectronics Technology Incorporated is our local partner with a 40 percent stake.
There's a foreign equity ceiling of 60 percent via direct and indirect investment.
We are looking for other partners to provide the backhaul connection between the landing station and telehouse. According to the regulations we need to negotiate with a local fixed-network operator so we are currently talking to not just the four integrated fixed-network operators but also the fixed network circuit leasing operators. I believe 13 other operators have got the circuit leasing license.
TT: Do you expect the current high cost of broadband services to come down?
Chian: Judging by experience in other markets when they have competition in the submarine cable market all the international telecom services come down by 30 percent per year.
TT: AGC is facing some pretty strong competition from the likes of Level Three and Above Net, which have also recently been granted submarine cable licenses in Taiwan. What will set AGC apart from the rest and make it competitive?
Chian: What differentiates AGC from our competition are several important points. First, we are a global player, not just a regional or just point-to-point player. Together with our parent company, Asia Global Crossing, we have over 200 cities in our network and over 27 countries so we provide global connectivity -- not just regional connectivity.
Second, we provide city-to-city connectivity. The traditional submarine cable system is basically shore-to-shore and, in many cases, it is a bilateral relationship. As our system is a private cable system so the whole system is owned by the one company. That's the reason we can provide city-to-city connectivity.
TT: What are the main drawbacks of a consortium of companies building a submarine cable as opposed to a single company?
Chian: Traditional submarine cables are built by a consortium of international carriers, which we call a club cable. For a club cable to provide service you need two operatrors to work together with their cables meeting at sea, literally.
The two operators need to work together to provide connectivity, while for us it's just one stop resulting in much easier interface for customers. Our selling point to end users is availability of big bandwidth, high capacity, lower, more reasonable costs; and service. Private cable services will be much better than a bilateral or club cable system. However, while submarine cable firms compete at the retail end they work together at the wholesale level.
Our ready-for-service date maybe be six months ahead of our competitors' so they will want to buy our capacity for their custcustiomersomers during this six months. And even if they have a submarine cable from point A to point B they still need redundancy in case the cable gets cut.
TT: Developing a worldwide submarine cable business is not a cheap undertaking. How has AGC financed its network?
RSS