RCOm has roped in six partners for the project so far, including China’s Alibaba Group.
Mumbai : Embattled Reliance Communications is laying a 68,000-km undersea cable to carry data across Europe and Asia, at an investment of USD 600 million. The ‘Eagle’ cable system, which will connect its base in India with Italy in the West and Hong Kong in the East, is expected to treble revenues for RCom’s wholly-owned subsidiary Global Cloud Exchange (GCX) in five years. The cable system is expected to be operational by the third-quarter of 2020 and will have a revenue potential of USD 1 billion per year, said RCom chief executive Bill Barney, reports the PTI. The cable will be financed by partners, whose numbers can go up till 30, he said, adding the company expects to garner over USD 700 million through such pre-sales as against the cost of USD 600 million.
RCom has already tied up with six partners, including Alibaba, for the cable and raised USD 300 million in commitments, he said. Barney said the company expects a spurt in IT and telecom activity in the country over the next five to ten years, due to which it is betting on the cable business. The cable potentially reaches over 75 per cent of the youth in the globe, which is also very educated, he said. The new cable will increase its total capacity by ten times as against the current capacity, he added. The size of what is being billed as the “new RCom” is much smaller but it is expected to be much leaner. Late last month the company sold its spectrum to elder brother-run Reliance Jio for an estimated Rs 23,000 crore that helped it skirt a slew of insolvency petitions and eventual liquidation. Saddled with a debt of Rs 45,000 crore, RCom exited the consumer-facing wireless business late last year.