Subsea Cable Business Evolution

Regional Updates (Middle East)

Mohamed Saro, CCO Gulf Bridge International

@PTCouncil #PTC18

Snapshot: Middle East submarine cables connecting the ME region to Europe

Subsea cable industry: Disrupt or die?

Source: TeleGeography 2017

� The Middle East is becoming a global connectivity hub

� Global network upgrades boosted capacity by 8000%

� Trans-Atlantic bandwidth to grow at 40% annually through

2020

� Forecast for Internet traffic per capita to explode from 5

gigabytes per capita to 14 gigabytes by 2018

� Content providers now account for 38 percent of total

worldwide used international bandwidth

� Content shifts into data centers

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Bandwidth price erosion

• Subsea cable surge in investments & intensified competition

• Content-driven on-demand bandwidth growth

• Commoditization of services

• High demand for data center traffic

• Large-scale Cloud computing enablement

• Demand for capacity doubles every 2 years

• Market liberalization

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Game-change of the major players

• Cloud is at the bottom of the seabed

• Major players boost high capacity demands & carriers/providers in the region are unable to accommodate their connectivity needs

• Their big presence leads to price decrease as they start building their own networks

• Between 2012 and 2016 the amount of international capacity deployed by companies like Google, Facebook, Microsoft and Amazon has risen 13-fold to 179 Tbps

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• Interconnection barriers Terminating, Transiting

• All of Middle East POPs are not Carrier neutral ( BH still monopolized)

• Domestic connectivity prohibitive pricing (last resort to Licensed operators)

• Geopolitical Routing Challenges

• Need for Access

• So Many Hubs…. No Real One!

• Cut-throat Competition (no new investment incentives)

• “Me too” Cable investment Approach

• Small Regional Cables Required

• Spectrum…Taboo

Connectivity challenges in the Middle East

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New international connectivity (AAE-1, SMW5)

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Regional Competition (Africa-1, DARE, Mercury)

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Median 10Gps IP Transit & Wavelength prices on Dubai-London

Source: TeleGeography

Transport comprised 86% of the cost of IP transit

services. Source: TeleGeography

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GBI: The OTT of the submarine industry in ME

• GBI’s smart and fully managed

service meshed network

bridges the East to the West

through the Middle East

• Diversification of routes

• Major disruptor bringing

content closer to the region

• Strong Partnerships in

potential business countries

• Interconnect with global data

centers

• Cloud enabler

• Interconnecting global

networks in major Internet

Exchanges

• Contributor to the digitization

of the Middle East

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Key drivers of growth: Fluid evolution in fusion of subsea industry and data centers

Straight path

Low latency

Low cost

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Thank you!