Capacity Magazine December / January 2018

VOL 18 ISSUE 1 DECEMBER/JANUARY 2018 VOL 16 ISSUE 5 AUGUST / SEPTEMBER 2016

Big interview GCX CEO Bill Barney discusses plans for a cable from China to Europe and new investments in Mumbai Business intelligence for the global carrier industry

mo vin g int

o th e

Capacity

fast lan e?

Special Report Subsea Special Report Security capacitymedia.com

INTERNATIONAL TELECOMS WEEK J O I N T H E G LO B A L W H O L E S A L E C O M M U N I T Y 6 - 9 May 2018 | Hy at t Re g en c y & Sw is s ôtel | Chica g o, IL Capacity

CARRIERS

VOICE / VOIP / VOLTE PROVIDERS

SATELLITE COMPANIES

SMS AGGREGATORS

INTERNET EXCHANGE POINTS

INTERNET SERVICE PROVIDERS

DATA CENTRES

IOT

CONSULTANTS & ANALYSTS

CLOUD SERVICE PROVIDERS

SECURITY & FRAUD SOLUTION PROVIDERS

OTT & CONTENT

www.itw2018.com | #ITW2018 | ITWTeam@capacitymedia.com

| 01

CONTENTS

Capacity magazine, December 2017/January 2018

VOL 18 ISSUE 1 DECEMBER/JANUARY 2018 VOL 16 ISSUE 5 AUGUST / SEPTEMBER 2016

Big interview GCX CEO Bill Barney discusses plans for a cable from China to Europe and new investments in Mumbai

NEWS & ANALYSIS

FEATURES

04 EUROPE

22 NET NEUTRALITY

Business intelligence for the global carrier industry

05 BEREC 2018

mo vin g int Cover image: iStock

o th e

06 INDIAN MOBILE

fast lan e?

Special Report Subsea

ON THE COVER

Net Neutrality: Moving into the fast lane? page 22

35 DATA AT WATER’S EDGE: Is this the end of the traditional cable landing station?

35

Data at the water’s edge

38 SUBSEA CABLE PROJECTS

The biggest projects in development

38

Subsea cable projects

13 MEF 3.0

46 SUBSEA CONNECT

42

14 LATIN AMERICA

‘™ ƒ”‡ • ÂƒĆĄÂ‡Â…Â–Â‹Â?‰ –Š‡ submarine cable industry?

GCX tackles Indian telco carnage with bold investment plan

46

Subsea Americas: How have OTTs affected the market?

07 ASIA-PACIFIC 10 NORTH AMERICA

Special Report Security capacitymedia.com

Moving into the fast lane?

18 AFRICA 21 MIDDLE EAST STRATEGIES

AMERICAS

50 GDPR

It’s not just the punitive damages carriers should worry about

56 SECURITY: MAINTAINING PEAK PRACTICE

The impact of shoppers on security 24 THE BIG INTERVIEWCapacity ƒ”… ÂƒÂŽÂ„Ć¤Â?‰‡”ǥ ‘Â? –Š‡ softwarisation of PCCW Global

58 GROWING THREAT OF

26 THE BIG INTERVIEW

Market trends on DDoS attacks

Bill Barney of GCX on a new cable from China to Europe and new investments in Mumbai

DDOS ATTACKS

62 APPOINTMENTS

52

NTT Com’s network security roadmap

63 A DAY IN THE LIFE

56

Security: maintaining peak practice

64 BLOG

58

The growing threat of DDoS attacks

30 THE BIG INTERVIEW

‹Â?…‡Â?– Â?‰Ž‹•Šǥ ‘ˆ Â‡Â‰ÂƒÂ’Â‘Â”Â–ÇĄ on tackling the enterprise market

42 THE BIG INTERVIEW

‹ŽŽ ƒ”Â?‡›ǥ ‘ˆ ÇĄ ‘Â? „‘Ž† subsea and data centre investments

after page 49 special report after page 29

GDPR: Know the rules

PEOPLE & DIARY

32 EXECUTIVE INTERVIEW

SECURITY special report INNOVATION

50

Â?†”‡™ ™‘Â?ÇĄ ‘ˆ

Ž‘„ƒŽ Communications, on ISQ’s purchase

Tony Rossabi, chairman of PTC, on transforming the global organisation

THE BIG INTERVIEW page 42

SUBSEA CABLE special report after page 33

Ruth Kennedy, director of business solutions at TalkTalk Business

…– Ž‘…ƒŽ ÇŚ ‘˜‹Â?‰ †ƒ–ƒ –‘ –Š‡ ƌ‘”†•

64 MARKET WATCH

Developments to keep an eye on

52 THE BIG INTERVIEW

Michael Wheeler, EVP of NTT Com, on evolving DDoS protection

SPONSORS THE BIG INTERVIEW page 30 Tony Rossabi, president of the PTC, talks about the transformation of the global membership organisation

capacitymedia.com

THE BIG INTERVIEW page 24 ƒ”… ÂƒÂŽÂ„Ć¤Â?‰‡”ǥ ‘ˆ PCCW Global, talks about the acquisition of Console Connect

44 SEA-ME-WE-5 47 AQUACOMMS 48 IOX 60 NOKIA

Capacity

editor’s letter | 03

Happy Christmas and New Year from Capacity!

F

rom everyone here at Capacity, have a Merry Christmas and a Happy New Year!

Enjoy the festivities and, if you’re lucky enough to get some time off, enjoy it!

This December/January issue is jam-packed with two special reports, focused on subsea (pages 33-48) and security (pages 49-61) and we have interviews with PCCW Global’s Marc Halbfinger, PTC’s Tony Rossabi, HGC’s Andrew Kwok, RCom’s Bill Barney, and NTT Com’s Michael Wheeler.

2017 has been a very long year and you deserve some Christmas cheer. There have been a plethora of developments: most recently, the repeal of net neutrality rules in the US (see page 22 for more). The devastation caused by the string of hurricanes not only destroyed homes but vital infrastructure in the Caribbean and it still plagues families today.

The work of the Télécoms Sans Frontières (TSF) is admirable and it must be commended for its continuing support to reconstruct vital communications in the region.

Since my last entry, Capacity has also recognised the achievements of a number of companies at our Global Carrier Awards (congratulations again to all the winners) and we have also recently held our inaugural Subsea Connect Americas event.

Capacity 2018 is set to host even more inaugural events from Capacity, including the India & SAARC event in early February. Get in touch if you’d like to find out more details about what’s in store. The year ahead will no doubt see the industry keeping pace with the surge of content and IoT will certainly push us, or even force us, to get even closer to the edge. Softwarisation is key here. Further investment in automation, SD-WAN, artificial intelligence, machine learning are all set to drive the digital economy further.

Follow Capacity on Twitter: @capacitymedia

That’s it from us though. Merry Christmas and see you in 2018!

Follow Capacity on Facebook: www.facebook.com/capacity-media Follow Capacity on YouTube: www.youtube.com/CapacitymagazineTV Follow Capacity on LinkedIn: www.linkedin.com/capacity-media

Management CEO Ros Irving ros.irving@capacitymedia.com

Sales Sales director Gareth Morris gareth.morris@capacitymedia.com

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International sales manager Michael Broughton michael.broughton@capacitymedia.com

ITW event director Ross Webster ross.webster@capacitymedia.com

International sales executive Charles Newman charles.newman@capacitymedia.com

Production Production and content coordinator Geralyn Samia geralyn.samia@capacitymedia.com

Editor Jason McGee-Abe jason.mcgee-abe@capacitymedia.com Twitter: @JasonMcGeeAbe Deputy editor James Pearce james.pearce@capacitymedia.com Twitter: @jamespearce87 Reporter Natalie Bannerman natalie.bannerman@capacitymedia.com Twitter: @nitnat1989

Accounts Administrative assistant Ruby Ward ruby.ward@capacitymedia.com

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Subscription enquiries Customer services customerservices@euromoneyplc.com tel +44 20 7779 8610 fax +44 20 7779 8602 Printer Stephens and George, UK Next issue February/March 2018 Published on 26 February 2018 Directors John Botts (Chairman), Andrew Rashbass (CEO), Colin Jones, David Pritchard, Sir Patrick Sergeant, Andrew Ballingal, Tristan Hillgarth, Imogen Joss, Tim Collier, Kevin Beatty, Jan Babiak, Lorna Tilbian

How to contact Capacity Capacity magazine is published by Telcap, a division of Euromoney Global Limited TelCap, 8 Bouverie Street London EC4Y 8AX, UK tel +44 20 7779 7227 (switchboard) fax +44 20 7779 7228 www.capacitymedia.com Capacity (ISSN 1471-762X) is published six times a year by TelCap. Annual subscription €250, £210, $340. © TelCap, 2018. All rights reserved. No part of this publication may by reproduced, stored or introduced into any retrieval system, or transmitted in any form or by any means, electronic, manual, photocopying, recording or otherwise, without the prior written permission of the copyright owners.

Although Telcap has made every effort to ensure the accuracy of this publication, neither it nor any contributor can accept any legal responsibility whatsoever for consequences that may arise from errors or omissions or any opinions or advice given.

04 | europe

VOIPX MARKET ‘$2.1BN BY END OF 2017’ AS DATA ROAMING DUE TO REACH 1,200PB BY 2020

A

BICS study into wholesale telecoms has found that that while traditional voice is declining, VoIPX traffic is expected to increase by more than 22%, reaching a value of $2.1 billion in value by the end of 2017.

The first BICS Report, which leverages data and findings from BICS’s network

Daniel Kurgan: Great change in the industry

infrastructure as well as data from the industry to evaluate the main trends and drivers in wholesale, found 4G traffic is tripling year-on-year. BICS claims this will peak in 2018, as the majority of mobile operators deploy next generation services to meet greater demand.

There will also be a surge in international voice over LTE services, which the report claims will grow by a compound annual growth rate of 99.3% over the next four years.

Mobile data roaming traffic is expected to increase from 368.7PB in 2017 to 1,228PB in 2020.

Internet of things (IoT) devices are expected to surpass mobile phones as the largest category of connected devices in 2018 driving even higher data usage.

BICS mentioned fraud as a key problem, with its own FraudGuard solution blocking more than 38.1 million fraud attempt calls in the last year, saving

€340 million in wholesale exposure.

The report claims the climate in the wholesale industry will lead to innovation, with wholesalers likely to launch services in: • Fraud prevention and security (eg protection against bypass fraud); • Cloud services and hosting (eg cloudbased unified communications); • IoT and machine-to-machine; • Mobility (eg hosted mobile VoIP, support for roaming, and mobile payments); • Putting more control in customers’ hands (eg customer APIs and portals).

BICS CEO Daniel Kurgan said: “We’re excited to launch our first report, particularly at a period of great change in the telecoms industry. The traditional notion of telecoms is no longer applicable, as the environment has been re-shaped by factors like the IoT, 5G, digital communications providers, the cloud, globalisation, smartphone penetration, and the growing risk of cyber-attack.”

Capacity

SPARKLE EXTENDS VIRTUAL NAP SERVICE TO ISTANBUL WITH DE-CIX PARTNERSHIP Sparkle, the international services arm of TIM group, has announced the availability of its Virtual NAP service in Istanbul.

Virtual NAP, which supports customers in connecting to the fast-growing regional IP ecosystem, is being offered through Sparkle’s proprietary data centre and is in partnership with DE-CIX, the internet exchange platforms (IXPs) provider.

Sparkle’s Virtual NAP gives customers the opportunity to have a virtual presence in selected IXPs without the need to dimension, implement and manage a complex proprietary international infrastructure and deploy IP equipment. It provides carriers and service providers with connectivity to the main IXPs in one package, including access

to a virtual router, an Ethernet port and immediate inclusion in the peering club.

Sparkle’s proposition in Istanbul will support regional customers in joining the fast-growing Balkan IP ecosystem. To celebrate the new Virtual NAP presence in Istanbul, Sparkle has launched a Virtual NAP promotion with DE-CIX in Istanbul, a promotion applicable to all contracts signed by 31 December 2017.

Virtual NAP is provided in partnership with internet exchanges in Frankfurt, Palermo and Istanbul with DE-CIX, Amsterdam with AMS-IX, London with LINX, in Paris with FRANCE-IX, in Sofia with NETIX as well as in multiple Equinix sites globally.

FRANCE-IX PICKS CORIANT TO UPGRADE OPTICAL TRANSPORT INFRASTRUCTURE France-IX and Coriant have teamed up to improve the scalability, flexibility and efficiency of France-IX’s optical transport infrastructure.

The news comes as France-IX says its customers have a rapidly growing demand for peering capacity driven by the uptake of content-hungry end-user applications.

France-IX upgraded its backbone and

has deployed the Coriant Groove G30 network disaggregation platform in its major data centre sites in the Paris metro area.

The solution supports high-capacity, low latency nx100G optical connectivity and allows France-IX to simplify network operations and deliver affordable 100G services to its member community.

2017 AVERAGE MONTHLY MOBILE DATA USAGE IN EUROPE TO HIT 2.4GB Average monthly mobile data usage is set to top 2.4GB per SIM card by the end of 2017, according to figures from GlobalData.

Disparities among different European countries mean that the highest usage country, Finland, is expected to see an average of 13.3GB per SIM per month, compared with much lower usage countries such as the Czech Republic, Germany, Slovakia and Ukraine, which are all below 1GB per SIM per month.

The likes of Austria (5.7GB), Poland (3.7GB), and Russia (3.5GB) all recorded high data usage, which GlobalData said was likely because operators in those countries offer unlimited data packages.It estimates that monthly average mobile data usage will range from 950MB in the Czech Republic to 727MB in Slovakia owing to the relatively high data pricing in these countries.

Finns are expected to use 13GB a month

december/january 2018

news analysis: berec | 05

BEREC PLANS FOR 2018: PRIORITISE 5G AND SUPERFAST NETWORKS T

he Body of European Regulators for Electronic Communications (Berec) has identified enabling 5G connectivity as a key priority for 2018, according to its incoming chairperson.

Johannes Gungl is the managing director of the Department of Telecommunications and Post at RTR, the Austrian Regulatory Authority for Broadcasting and Telecoms, and will take over from French regulator Sebastien Soriano as Berec chair in 2018.

Speaking at the European Competitive Telecommunications Association (ECTA) regulatory conference in Brussels, Gungl said Berec is taking a “holistic approach” to the deployment of 5G, but it was one of the key issues on his agenda for 2018.

One consideration he discussed was the availability of backhaul required to support the fifth generation of mobile connectivity – a key issue in Europe.

In his speech, he said: “On 5G there is already a lot of activity going on, despite the fact that 5G will not be operational in Europe until 2020. However the challenges to be addressed are getting clearer. These challenges are ranging from the work on standards, interoperability, new business models, network sharing to coverage and security.

“Berec will make 5G a strategic priority with the aim to enable European-scale solutions. It is our goal to help reap the benefits of an early roll-out of 5G in Europe. Berec will actively and closely follow the development and will work to identify and eliminate potential hurdles to a smooth deployment of 5G.”

New connectivity He outlined several work items that Berec has planned for 2018, which began with a study on the changes to the value chain in the context of the new connectivity.

It will also look into the award procedures, infrastructure sharing and the compatibility of current net neutrality rules within the concept of network slicing.

“There is one thing that I want to emphasize in this forum and that is that Berec is well aware of the role of competicapacitymedia.com

tion in relation to 5G and especially the backhaul infrastructure availability,” he added. “Let me remind you that just recently Berec has launched a report on fixed and mobile network convergence addressing exactly this issue.”

With net neutrality a hot topic of discussion following the US regulator’s decision to revoke Obama-era free internet rules, Berec is also looking at its approach to the principles.

Berec has detected a Capacity strategic priority to work on identifying competition problems in the development of high-capacity networks” Johannes Gungl, future chair, Berec

importance of high capacity networks, but said the migration from legacy networks, the roll-out of fibre service, and market consolidation can lead to new competition problems.

“Very high-capacity networks have become central for consumers and businesses. But the variety in the deployment of high-capacity networks has led to different market conditions across Europe,” he said.

“Berec has detected a strategic priority to work on identifying competition problems in the development of highcapacity networks. Here I want to respond to another comment made by ECTA during the public consultation. We can confirm that there will be no one-sided focus on questions of high-capacity network deployment. There is still work to be done on existing infrastructures, but our work must be forward-looking and future-proof.”

His speech came at a time when the future of Berec was under scrutiny, with the European Commission proposing that Berec be given a new mandate that would have potentially increased its powers by making it a full-fledged EU agency.

Ministers rejected this plan, saying Berec should not be able to adopt binding decisions, as proposed by the commission.

MEPs have also opposed the proposal.

Gungl said the body of regulators will work closesly with its members – the national European regulators – in their efforts to apply the EU’s net neutrality (NN) regulations in a consistent way across the continent.

“In 2018 Berec will provide input to an evaluation of the NN rules that has to be done until end of April 2019 and we will continue to monitor the implementation of the NN rules across Europe,” Gungl added.

High capacity networks The final concern he outlined during his presentation was around connectivity challenges. In this he recognised the

Johannes Gungl: Net neutrality questions

06 | news analysis: india

And then there were four:

DEATH IN INDIAN MOBILE T he Indian mobile business is looking like an Agatha Christie murder story. In 2014 there were 13 operators in the business in India, from Bharti Airtel with 22.53% of the market down to Quadrant with 0.24%. Soon there’ll be four or five.

The industry is going through a process of rapid consolidation, forced upon it by a reaction to Reliance Jio, which launched its 4G services in September 2016. Jio, owned by Reliance Industries, came in with a launch offer of free voice calls and data at 50 rupees ($0.75) a gigabyte.

In competition, market leader Airtel now offers subscribers 10GB a month on 3G and 4G networks for 399 rupees ($6.25). If you want to use 50GB in a month, it’ll cost the equivalent of $15.60.

Those rates include unlimited calls – and users of more than 20GB get live TV and movies too.

Even 2G users are getting good deals. In December 2017 Vodafone India offered unlimited calling throughout India and unlimited 2G data for just $2.80 a month.

“India is the largest user of bandwidth in the world,” said Bill Barney, CEO of Global Cloud Xchange (GCX), speaking to Capacity in an interview for this issue (see pages 42-43). “It was the fifth largest before Reliance Jio.” Barney’s company is owned by Reliance Communications (RCom), which has nothing to do with Reliance Jio except that both are run by warring siblings – a fact that has added an extra dimension to the business mess that is Indian mobile communications. Mukesh Ambani is chairman of Reliance Industries, which owns Jio. His brother Anil Ambani owns RCom. Both are offspring of Dhirubhai Ambani, who died in 2002 after building up the industrial group.

The Jio competition began to bite as 2017 started. At the end of 2017, market shares are very different, according to the Telecoms Regulatory Authority of India (Trai), the regulator. There are 1.18 billion

wireless subscriptions, says Trai, on top of 23.5 million wireless connections.

Bharti Airtel has nudged up to a 24.21% share on 31 October 2017. Trai still lists 10 operators, with Sistema at the

Four operators have exited the mobile market” Bill Barney, CEO, Global Cloud Xchange

bottom, with just 0.28%. Jio is fourth with 12.39% at the end of October, but has shown theCapacity fastest growth, putting on more than 7 million customers in October alone. RCom lost nearly 11 million, and Tata lost 4.7 million. The whole market lost 4.8 million customers: many users have dropped the idea of having two or three SIM cards as Jio and others bundle cross-network calls into their deals.

Bharti Airtel is set to buy Tata Teleser-

vices, the mobile arm of the industrial group that also owns the unaffected Tata Communications. In 2017 NTT DoCoMo bailed out of its partnership with Tata Teleservices after the Tata group came to a settlement. In another deal in 2017, Bharti Airtel took on Telenor’s heavily loss-making operation in India.

That will give Airtel a market share of 31%, based on October 2017 levels.

Vodafone and Idea Cellular are set to merge in 2018, giving the combined company a market share of 34%, again based on those October 2017 numbers.

RCom bought MTS India, the brand name of the Russian-owned Sistema group, and it was due to buy Aircel, but the deal fell apart – as RCom effectively decided to close down its mobile business and focus on enterprise telecoms and its GCX international cable business.

“We’re closing down the wireless business and selling off our spectrum and our tower real estate,” said GCX’s Barney, who is also co-CEO of RCom, in that Capacity interview. “Four operators have exited the [mobile] market – Tata, whose fixed-line business is listed separately, Sistema, Telenor and us.”

The shrinking Indian mobile market, 2017 COMPANY Bharti Airtel * Vodafone India ‡ Idea Cellular ‡ Reliance Jio BSNL # Aircel Reliance Communications † Telenor India * Tata Teleservices * MTNL # Sistema †

MARKET SHARE (%) 24.21 17.68 16.20 12.39 9.03 7.49 5.20 3.81 3.41 0.31 0.28

GAIN OR LOSS/MONTH +3,148,164 +879,413 +713,408 +7,344,371 +602,511 -497,264 -10,936,923 -1,144,523 -4,711,759 -11,520 -231,152

Notes: * merged into Bharti Airtel; † merged into RCom; ‡ Vodafone India and Idea Cellular are merging; # state-owned, with a merger rumoured. Data: Market share on 31 October 2017; gain or loss for month of October 2017. Source for all numbers: Trai annual report

INDIA & SAARC 2018 7 & 8 February 2018, New Delhi

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JOIN THE PEERING FORUM ON 8 FEBRUARY

asia-pacific | 07

EQUINIX BUYS METRONODE FOR A$1BN

E

quinix has announced a deal worth more than A$1 billion (US $792 million) to acquire Australian data centre firm Metronode.

The acquisition will expand Equinix’s global footprint by adding 10 data centres across Australia, bringing Equinix’s total number of International Business Exchange (IBX) centres in Australia to 15 facilities overall. Metronode adds more than 80,000 sq metres of land, 90% of which is owned, to the global portfolio of Equinix.

It will see Equinix add two data centres in Melbourne, three in greater Sydney, two in Perth and one each in Canberra, Adelaide and Brisbane, totalling around 20,000 square metres of extra colocation space to its Australian footprint.

The deal also means Equinix will own Metronode’s Perth site, which will house the landing station for the new Vocus Australia Singapore Cable, giving the firm more access to international connectivity services.

“Growth and expansion is a continued

focus for Equinix as we strive to bring together market leaders and innovators on a single, global interconnection platform,” said Samuel Lee, president of Equinix Asia-Pacific.

“The acquisition of Metronode helps Equinix to accelerate the expansion of our global footprint and support our customers in the region as they move their infrastructure to the edge, closer to their customers and partners.”

Jeremy Deutsche, who is managing director of Equinix’s Australian division, said the deal would also allow the company to build out sites in Australia that are currently in development. He added: “This will enable us to continue to deliver the level of interconnection that our customers expect, and signifies our commitment to the region in supporting the growth of digital businesses. We look forward to welcoming Metronode into the Equinix family.”

David Yuile, CEO of Metronode, added: “With this acquisition, companies operating

Samuel Lee: Focus on growth for Equinix

across Australia will have access to the largest network of highly interconnected data centres in the world. Metronode is excited to become part of an industry-leading company and further help our customers to build their digital infrastructure and drive competitive advantage in the digital age.”

The deal is expected to close in the first half of 2018, subject to regulatory approval.

CapacityOFF PARTS OF ITS CLOUD AMAZON SELLS BUSINESS IN CHINA FOR $300M

Malaysia’s TS Global Network satellite company becomes part of Telkom

TELKOM TO BUY 70% STAKE IN MALAYSIAN SATELLITE COMPANY Telekomunikasi Indonesia (Telkom) is set to acquire a 70% stake in Malaysian satellite company TS Global Network (TSGN) for a reported 108.5 million ringgit ($26 million).

“This partnership and alliance is our effort to expand in the regional market and realize our vision to be a digital telecommunications company,” said Andi Setiawan, Telkom’s vice president for investor relations.

Abdus Somad Arief, director for wholesale and international services at Telekomunikasi Indonesia, said that the synergy with TSGN is in line with Telekom’s strategy to expand its satellite business.

The acquisition is subject to regulatory approval. capacitymedia.com

Amazon has sold off hardware from its public cloud business in China to Beijing Sinnet Technology.

Amazon signed an agreement in August 2016 to let the Chinese tech firm operate cloud technology and related services provided by Amazon Web Services (AWS) around the Beijing area in China, based on Sinnet’s own internet infrastructure around the capital.

The sale, which has seen Sinnet put together up to 2 billion yuan ($301 million), comes amid tightening regulation over online data in the country.

Sinnet said in a regulatory filing that the purchase would help it “comply with China’s

laws to further improve the company’s AWS cloud services” in terms of quality and security.

“AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS’s industry leading cloud services. Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services,” an AWS spokesperson told Capacity.

“As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) region. ”

PACIFIC NATION OF PELAU GETS FIRST SUBSEA CABLE CONNECTION AFTER $20M INVESTMENT NEC has connected the tiny Republic of Pelau to the SEA-US cable, using a new 500Gbps spur, at a cost of $20 million.

The SEA-US cable, linking south-east Asia to the US, went into operation only four months ago. The new spur connects with SEA-US on the US island of Guam.

This is the first time Pelau, one of the world’s smallest nations with fewer than 23,000 people, has been connected to the world by cable: until now it has relied on satellite communication.

Pelau, with just 23,000 people, now has a cable connection to the rest of the world

08 | asia-pacific

GLOBAL SWITCH TEAMS WITH CHINA TELECOM GLOBAL TO LAUNCH $640M DATA CENTRE

C

hina Telecom Global and Daily Tech have partnered with Global Switch to launch a new HK$5 billion (US $640 million) data centre in Hong Kong.

The new facility will be one of Hong Kong’s largest carrier and cloud neutral multi-customer data centres, according to Global Switch, offering low latency connectivity in a network-dense environment.

The data centre will be located in Tseung Kwan O (TKO) Industrial Estate, part of the Hong Kong Science and Technology Park development. It will provide 71,000 sq m of space with 100MVA power supply, sitting adjacent to the TKO cable landing station.

It will deliver a cloud and IT ecosystem for the region, offering access to a variety of products, services and

features, including resilient power and cooling solutions; colocation services, networking services (internet, MPLS, IEPL, CDN and cross-connect services); biometric security, network security services including anti-DDoS. Deng Xiaofeng, CEO of China Telecom Global, said: “CTG is focused on leading the development of worldclass network services to facilitate our customers’ demands for globalisation and digitalisation.

“We see tremendous business potential in the coming years as more and more people will be connected to the internet. Leveraging our cooperation partners’ complementary strengths and strategic collaboration, we will continue to provide high-value services to build a brighter future for globalisation and informatisation.”

CONSOLE CONNECT SET TO FACILITATE THE Capacity SOFTWARISATION OF PCCW GLOBAL Software has become the core strategy but physical network service providers aren’t necessarily at the core of software development, said Marc Halbfinger, CEO of PCCW Global, at Capacity Asia.

“We have built our network globally, with over 600,000km of fibre wrapped around the globe, but how do we get closer to the edge?,” Halbfinger asked Capacity Asia delegates in Hong Kong during his ‘Adapting Your Portfolio For Next-Generation Services’ presentation. Halbfinger stressed to delegates the need to get as close to the edge as possible and the role of automation.

“We shouldn’t look at OTTs as customers or disruptors but recognise that they are evolving the model. We’re the ones who aren’t evolving fast enough and we need to organise ourselves towards automation to provide accessibility,” said Halbfinger.

“Let’s not get scared that some players are evolving the model, still bandwidth connectivity, storage capability and getting as close to the edge to deliver applications will be critical, including video delivery.”

PCCW Global felt the need in its network to move from a physical component towards a software delivery to enhance deliverability and ensure that it can get to an automated software-based capability for delivery at the wholesale interconnect capability.

The PCCW Global CEO said: “As a result the company recently acquired the assets, code, capability and most importantly the people of Console Connect. We believe these will help drive PCCW Global to a new environment that will enable us to facilitate the softwarisation of the carrier.”

A full interview with Halbfinger can be read on page 24.

Marc Halbfinger, PCCW Global: Carriers need to get as close to the edge as possible

The launch of the facility will increase the size of Global Switch’s global portfolio to 320,000 sq m, with stage two of the facility to become operational in 2019.

Deng Xiaofeng: Business potential

AMS-IX HONG KONG LAUNCHES DEDICATED 100GBPS PORTS An HGC and AMS-IX joint venture has upgraded its platform to give users the ability to connect with the internet exchange via dedicated ports with a capacity of up to 100Gbps, in order to cope with increasing internet traffic.

Through HGC, AMS-IX HK can provide routes to potential partners, including mobile operators, in multiple countries and regions in Asia-Pacific, including Vietnam, Cambodia, the Philippines, Thailand, Singapore, India, Korea, Australia and Hong Kong.

Andrew Kwok, CEO of HGC, said: “HGC’s IPX enables mobile operators to reach roaming partners via our extensive coverage. This has made AMS-IX Hong Kong an attractive internet peering platform for IPX partners, mobile operators and OTT players looking to interconnect in Hong Kong and Amsterdam.”

AMS-IX Hong Kong offers an inter-IPX peering platform tailored to local market conditions.

Jesse Robbers, chief commercial officer of AMS-IX, added: “Connected parties can access AMS-IX Amsterdam directly through AMS-IX Hong Kong, where combined both internet exchanges boosts 850+ connected parties. As a result of the growing number of connected parties, AMS-IX Hong Kong reached a new traffic peak of 39Gbps with a connected capacity of 400Gbps in early December 2017.” december/january 2018

NO ONE LIKES BEING ON HOLD

Capacity

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10 | north america

DOJ LAUNCHES LEGAL BID TO BLOCK AT&T’S $85BN TIME WARNER TAKEOVER DEAL The US Department of Justice (DOJ) has launched legal action in order to block AT&T’s proposed $85 billion acquisition of media giant Time Warner.

The department claims the merger would reduce competition and potentially lead to higher consumer prices by concentrating too much control of media properties under one company. The DOJ says in its complaint that AT&T would have the “incentive and ability” to charge rivals “hundreds of millions of dollars more” for the right to content from Time Warner channels including HBO and CNN. The DOJ has said it prefers structural remedies, such as the divestiture of assets,

over conditions that were commonly imposed under the Obama administration.

That may include offloading assets such as DirecTV, owned by AT&T, or Time Warner’s Turner Broadcasting arm.

AT&T claimed the suit was a “radical and inexplicable departure” from typical antitrust practice, vowing to fight the move. David McAtee, senior executive vice president and general counsel at AT&T, said: “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.”

SPRINT AND T-MOBILE IN PLANS TO EXPAND US NETWORKS WITH SMALL CELLS

WINDSTREAM EXPANDS SDN ORCHESTRATED WAVES TO 50 MARKETS ACROSS THE US

Sprint and T-Mobile US have announced plans to improve access to their networks using dense arrays of small cells.

T-Mobile was first off the mark by announcing plans to deploy 28,000 small cells. Now Sprint says it has a solution to turn Cisco WiFi units into small cells for 4G mobile services.

“This innovative LTE small cell literally clips onto existing Cisco WiFi infrastructure and can be deployed in less than 30 minutes, providing a very cost-effective way to rapidly improve indoor service,” explained Robert Kingsley, director of small cell and wifi development at Sprint.

T-Mobile’s announcement a few days before came from Karri Kuoppamaki, the former Nokia executive who is now vice president of technology development and strategy. Speaking at the Next-Gen Wireless Networks Summit in Dallas, Texas, he said small cells were T-Mobile’s plan to reduce dependence on large-scale towers.

Kuoppamaki said that “the best way” to deploy small cells is “to partner with fibre providers”, which will install the cells and connect them to their fibre networks. “That is a very efficient way to actually get to the point when you go from having a few to having tens of thousands in the network,” added Kuoppamaki.

Sprint said it was using a solution from Corning subsidiary SpiderCloud. The operator is mainly looking for a solution for enterprise networks: a company will be able to deploy SpiderCloud LTE radio nodes on its local area network.

Windstream, a provider of advanced network communications, has recently announced the expansion of its SDN Capacity Orchestrated Waves (SDNow) transport service.

SDNow, a high-speed optical wave service that uses a programmable SDN environment, is now available in 50 markets across the US, including major cloud connectivity and international interconnect locations.

Driven by the need to support the rising demand for connectivity solutions into the Americas, Windstream’s SDNow brings the benefits of SDN-provisioned services to even more transport customers in key East and West Coast international entry points

David McAtee, AT&T general counsel: No legitimate reason for merger to be blocked

to the US including New York City, Boston, Ashburn, Miami, Jacksonville, Los Angeles and San Jose.

Using automated service orchestration and provisioning platforms, Windstream says it has created a dynamic service environment that will enable customers to order SDNow 10G point-to-point circuits for 1,500 long-haul route combinations, with delivery in 20 days.

Windstream said this further proves its commitment to deliver programmable network solutions to its customers and driving operational improvements. SDNow enables the integration of future innovative services, including on-demand and calendared bandwidth.

ADTRAN AND TIM SIGN DEAL FOR SD ACCESS Adtran and TIM have signed a memorandum of understanding relating to Adtran’s SDN/NFV technologies and platforms. Under the terms of the agreement TIM will evaluate Adtran’s SD access solution, called Mosaic, as part of its analysis of the advantages and flexibility of SDN architectures in relation to its ultra-broadband fibre access network.

Speaking on the announcement, Ronan Kelly, CTO of EMEA and APAC at Adtran, said: “Operators in highly competitive environments are challenged to extend gigabit services due to the time and cost that can be associated with traditional optical access technologies. With SDN and NFV innovation, operators like TIM can significantly accelerate gigabit society goals

Ronan Kelly: flexible gigabit services

by launching flexible gigabit services that dramatically reduce subscriber disruption and time-to-market.”

Adtran said Mosaic creates what they describe as a completely “open, programmable and scalable” network. december/january 2018

Capacity

12 | north america

FCC CREATES NEW RULES FOR NEXT-GENERATION NETWORKS

ARCTIC SUBSEA CABLE GOES INTO SERVICE TO CONNECT NORTHERN ALASKA COMMUNITIES

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The first subsea cable in the US part of the Arctic Ocean has gone live, with the entry into service of the northern Alaska section of Quintillion’s network.

Quintillion plans to extend its cable west to Tokyo and east to London, but the first section links the Alaskan coastal communities of Utqiagvik, Wainwright, Point Hope, Nome and Kotzebue.

The system will deliver gigabit and higher bandwidth services on a 1,400 mile (2,250km) subsea and terrestrial fibre network, including a subsea trunk line from Prudhoe Bay to Nome with branching lines to the five communities.

Interim CEO George Tronsrue said: “The Quintillion system makes it possible for local service providers to offer the same world-class products and services available long ago to consumers in the Lower 48.” That’s the term for the 48 states of the US between Canada and Mexico.

Crews completed installation of the Alaska Arctic portion of the international Quintillion subsea cable system in early October, and the company expects its customers to be live soon, enabling high speed broadband capability to consumers and businesses in these communities.

he Federal Communications Commission (FCC) has implemented a number of reforms to encourage investment by providers in the next-generation of networks.

One of the approved changes involves access to utility poles and conduits: under the new rules, local providers are given

Will Johnson, Verizon: Policies encourage investment of next-generation broadband

equal access to each other’s poles. The FCC has reduced costs faced by broadband providers by barring pole owners from charging for certain costs they have already recovered from others (called make-ready fees). Attachment disputes are speedily resolved by the FCC’s enforcement bureau through use of a 180-day “shot clock.”

Additionally, there is another set of reforms to rules that delay or stop companies from replacing copper with fibre or that delay the discontinuance of old technologies in favour of services using internet protocol (IP) technologies.

Commenting in the announcement, Will Johnson, senior vice president for federal regulatory and legal affairs at Verizon, said: “We’re very pleased that the FCC continues moving forward on policies that will encourage investment and deployment of next-generation broadband networks.”

He added: “Verizon is a leader in deploying advanced networks to serve Capacity our customers, and several of the orders adopted by the FCC today will bring the benefits of these networks and services to more Americans more quickly.”

EQUINIX EXPANDS IX OFFERING AND UNVEILS SDN CONNECTIVITY Equinix has unveiled plans to expand its internet exchange operations into nine new cities across EMEA and the Americas in 2018, while also launching a new SDNpowered inter-metro connectivity service.

The company also said it plans to announce a series of coverage, connectivity and service initiatives that will deliver increasing value to customers. It will expand

its IX service to Amsterdam, Denver, Dublin, Frankfurt, Houston, London, Manchester, Milan and Stockholm in addition to the 22 cities in which it’s currently available.

The new inter-metro connectivity will be delivered through the Equinix Cloud Exchange Fabric (ECX Fabric – renamed from the Equinix Cloud Exchange). Equinix’s customers will be able to connect to their

own infrastructure across Equinix locations.

Sara Baack, CMO at Equinix, said: “As digital transformation intensifies, business possibilities have no limits and neither should an organization’s IT infrastructure. Building a digital business requires the ability to reach strategic global destinations on demand, to access everyone that matters, and to bring people, clouds, data and things together.

CYXTERA PARTNERS WITH MEGAPORT FOR ELASTIC INTERCONNECTION Cyxtera Technologies has partnered with Megaport to offer elastic interconnection services in Dallas, Phoenix, Washington DC and London.

Cyxtera, which has a combined worldwide footprint of 57 data centres, will use Megaport connectivity to offer direct connections to public cloud platforms, rapid provisioning and an ecosystem of more than 240 service providers.

Other key benefits of the new offering, highlighted by Cyxtera, include elastic design with 1Mbps to 10Gbps options, and ease of use and the tools needed to build an

on-demand network. “Customers need the ability to rapidly connect their mission critical infrastructure within data centers to cloud providers,” said Nicole Cooper, executive VP North America for Megaport.

“Through Cyxtera, we can bring Megaport’s flexible SDN to even more organizations, thereby helping lower the barrier for cloud adoption by eliminating long-term, fixed bandwidth circuits. This reduces costs, improves performance and ensures greater security for their applications, making it easier to provision connectivity to key service providers.”

Nicole Cooper, Megaport: Flexible SDN

december/january 2018

news analysis: mef | 13

MEF UNVEILS ITS ‘TRANSFORMATIONAL’ MEF 3.0 FRAMEWORK M

EF (Metro Ethernet Forum) has unveiled a new global services framework aimed at defining, delivering and certifying orchestrated services across automated networks.

The MEF 3.0 Transformational Global Services Framework aims to help telcos to deliver the dynamic performance and security required as demand for increased bandwidth and more agile services grows.

MEF 3.0 is the follow-up to Carrier Ethernet 2.0 (CE 2.0) and sees the global standards body move beyond carrier Ethernet to look at automated and virtualised services by providing a suite of LSO (lifecycle service orchestration) APIs that offer an on-demand, cloud-centric service, MEF said.

MEF unveiled the framework, which includes much shorter testing time for certification of new services, at the MEF17 event in Orlando, Florida.

Speaking at the launch, MEF chairman Nan Chen said: “MEF 3.0 is the … next step in our journey to transform the industry with services and networks that are easy to manage and monetise, and that deliver lasting value to its customers. We are unleashing the full potential of industry innovation by enabling dynamic services to be orchestrated across multiple provider networks powered by LSO, SDN and NFV.” Nearly 150 companies currently sell CE 2.0 certified products, forming a significant proportion of the estimated $80 billion carrier Ethernet market.

MEF 3.0 comprises four main “pillars” that form the new concept: standardised orchestrated services; open LSO APIs; service and technology certifications; and expanded community collaboration. The MEF 3.0 service family includes dynamic carrier Ethernet, wavelength, IP, SDWAN, security-as-a-service, and other virtualised services that will be orchestrated over programmable networks using LSO APIs. MEF is increasing the agility of its certification programmes to accelerate availability and adoption of MEF 3.0 certified services and technologies. It is also looking at expanding collaboration capacitymedia.com

Nan Chen: MEF 3.0 is the next step in transforming the industry with services and networks

Capacity

across its community by working with a number of other industry bodies, including the Global Leadership Forum (GLF), TM Forum, the GSMA and others on open-source projects and standards in order to create a shared vision of dynamic services orchestrated across automated networks.

Multiple providers MEF’s LSO Reference Architecture helps guide agile development of standardised LSO APIs that enable orchestration of MEF 3.0 services across multiple providers and network technology domains.

Carriers including AT&T, CenturyLink and Orange are lining up to support the first software kits that allows service providers to orchestrate connectivity services. Alessandro Talotta, chairman and CEO of Sparkle, said: “MEF 3.0 is the next step to fully empower our customers with dynamic control, efficiency and assured quality of service over end-to-end sophisticated connectivity and cloud solutions in a multi-provider global network ecosystem.”

Mirko Voltolini, head of network on demand at Colt, said: “Colt is an active member of MEF and a strong advocate of its efforts in standardising and simplifying the adoption of interoperable connectivity services. MEF 3.0 builds on the solid platform established by CE 2.0 and widens its scope to include services beyond

carrier Ethernet. We expect MEF 3.0 will replicate the success of CE 2.0 and accelerate carrier to carrier business interactions with the adoption of a rapid and agile approach to define standards.”

MEF announced two industry-leading releases at a conference in The Hague: the Sonata lifecycle service orchestration (LSO) software development kit, and the Presto SDK for orchestrating connectivity services over multiple network technology domains, which both tie-in to MEF 3.0.

A tremendous amount of collaborative work has been going on to build a global community of automated, softwaredefined and interconnected networks that will support orchestration of on-demand services,” added Chen.

Sonata is backed by a number of carriers, including AT&T, Orange, Colt, CenturyLink and PCCW Global, as well as hardware and software vendors.

Contributors to Presto include CenturyLink, Cisco, Ericsson, Huawei, NEC and Nokia. Tara Cummings, solution architect at Ericsson, said: “The Presto SDK highlights the agile process at MEF that enables acceptance, implementation and feedback for specification standards. This collaborative effort combined with software and networking expertise provides an excellent reference implementation that removes ambiguity and reduces the learning curve that comes with interpreting standards.”

14 | latin america

CARRIERS SAY MONET SUBSEA CABLE IS READY FOR SERVICE

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lgar Telecom, Angola Cables, our technology and cost needs well into Antel, Google and TE SubCom the future.” have announced that the Monet The Monet cable has been built using cable system is now ready for service, with SubCom’s Open Cables concept, commercial traffic due to begin shortly. providing the consortium with choice and This news means that the low-latency flexibility in the selection of line cards, 10,556km submarine cable connecting while continuing to take advantage of the Florida to Brazil is complete and ready to latest wet-plant technology. As a complete provide approximately 64Tbps of capacity offering, Monet provides a powerful and to users. stable internet backbone designed to serve Commenting on the news, Antonio the current connectivity needs in the Latin Nunes, chairman of the Monet executive American region as well as meeting the committee, said: “We are proud to have needs for the increased capacity demands completed this project with SubCom in in the future. the most efficient manner possible.”

He added: “The open cable approach enabled each Monet party to meet its respective network objectives while still benefitting from Capacity the strengths of a joint build partnering model.

Each of the parties, working with TE SubCom, was able to create a network Monet cable: 64Tbps over 10,556km from Florida to Brazil that should meet

NEW FOOTPRINT TO BRAZIL FROM TATA COMMUNICATIONS Tata Communications has extended its reach to Brazil, connecting to and from Latin America using its global network and Seabras-1 system.

The company will harness its emerging markets expertise to support the economic growth of Brazil and the rest of Latin America. “Our expansion to Brazil is part of our commitment of continually building our capabilities and reach to meet our customers’ increasing data demands worldwide,” said Bob Laskey, head of Americas at Tata Communications.

“Enterprises across sectors such as financial services, technology and manufacturing are embracing the cloud, mobility and the internet of things to survive and thrive in constantly evolving environments. Secure, reliable, superfast connectivity on a global scale is the foundation for this digital transformation,” added Laskey.

GLOBENET OPENS TIER III COLOMBIAN DATA CENTRE FOR BUSINESS GlobeNet has completed the construction of its new data centre facility in Barranquilla, Colombia, which is now open for business.

The 200 sq m Tier III facility is adjacent to the GlobeNet cable station in Barranquilla and has been designed and built to meet growing demand for wholesale telco, high-speed data and IT services in the Latin American market.

The facility, which supports a complete portfolio of IaaS services, IP transit and domestic and international connectivity solutions, has international access to the US, Brazil, Bermuda and Venezuela via the wholesale provider of telecom infrastructure in the Americas’ network.

“This is a hallmark time for GlobeNet and for the advancement of secure and reliable network interconnection throughout Latin America,” said GlobeNet CEO Eduardo Falzoni.

“Our highly secured Barranquilla facility will maintain GlobeNet’s legacy of neutral interconnections for international and local operators as well as enabling access to international destinations via its subsea cable system. We offer a dynamic and flexible way to expand a network or access international content, with low latency routes available to major interconnection points. It’s been a great year for us and we’re thrilled to commemorate the year by opening the doors to our new facility.”

EUTELSAT TO PROVIDE SATELLITE CONNECTIVITY FOR COLOMBIAN DEFENCE NETWORKS The Colombian Ministry of Defence has signed an agreement with Eutelsat Communications for capacity on the Eutelsat 115 West B satellite.

The multi-transponder contract, the first between Eutelsat and the Colombian ministry, follows the signature of a government-to-government agreement between France and Colombia, designed to encourage cooperation in the context of the France-Colombia Year.

“In the interests of improved organisation of the satellite communications networks operated by our defence forces the Colombian Ministry of Defence decided to seek a single contractor to meet its diverse needs,” said General José Javier Pérez Mejía, deputy minister of defence of Colombia.

“Of the countries we invited to contend, France, through Eutelsat, presented the best economic and technical

proposal, leading us to select Eutelsat 115 West B.” The Colombian government said it will use Eutelsat 115 West B’s exceptional power levels over the Andean region to host Ministry of Defence networks across the country, used by the General Command of the Colombian Military Forces, the Army and the Air Force.

General Pérez Mejía: Diverse needs

december/january 2018

Capacity

16 | latin america

AMÉRICA MOVIL, AT&T, OI AND TELEFÓNICA LAUNCH RICH COMMUNICATIONS SERVICES

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oogle is working with carriers América Movil, AT&T in México, plus Oi and Telefónica to launch advanced rich communication services (RCS) in Latin America.

In collaboration with these carriers, alongside device manufacturers and the GSMA, Google will roll out RCS

Amir Sarhangi, Google: RCS will improve everyone’s messaging experience

messaging in the countries where they operate, bringing better messaging to more than two thirds of all mobile subscribers in Latin America. The initiative has already been in practice in Europe, North America and Asia.

“One of the most powerful aspects of RCS messaging is the ability to improve everyone’s messaging experience at scale, regardless of network, country, or device type,” said Amir Sarhangi, head of RCS at Google, in a blog post.

“The service will be powered by the Jibe RCS Cloud from Google, and will be fully interoperable between networks through the Jibe RCS hub. In addition to connecting subscribers across América Móvil, AT&T in México, Oi and Telefónica, we’re also connecting subscribers with other networks on the Jibe RCS Hub,” he said. “A Telcel subscriber in Mexico City ... could have a Capacity group chat over RCS with a Movistar subscriber in Mexico City and a Sprint subscriber in the US.

FACEBOOK AND TELEFÓNICA TEAM UP TO TACKLE LATAM DIGITAL DIVIDE Facebook and Telefónica have announced a collaboration to tackle rural connectivity challenges in Latin America in order to reduce the digital divide in the region.

The partnership between Telefónica and Facebook began with with projects in Peru by combining innovative backhaul and access solutions to boost connectivity.

These include solutions such as the deployment of OpenCellular, an opensource disaggregated wireless platform.

Aaron Bernstein, director of connectivity ecosystem programs at Facebook, said: “Our collaboration with Telefónica in Latin America is an important example of how we’re working to overcome barriers that prevent people from getting much-needed connectivity.

“Ensuring that everyone in the world has reliable and affordable internet access is key to Facebook’s core mission of building global community and bringing the world closer together.”

Telefónica and Facebook said they will use lessons learned in Peru to expand the project, helping to overcome challenges posed to connectivity by the varied terrain and harsh climate in the region.

SEABORN CUTS SEABRAS LATENCY TO 105MS

REID QUITS C&W AS LIBERTY GLOBAL SPLITS OFF SEPARATELY QUOTED LATIN AMERICAN UNIT

Seaborn Networks has delivered SeaSpeed Tier 1 on its Seabras-1 submarine cable network. This is the lowest-latency route between New Jersey and São Paulo, with a measured latency of 105.05ms round-trip delay (RTD) between the exchange data centres. It is a direct exchange-to-exchange service with no intermediate drops allowed at the cable landing stations.

Additionally, Seaborn also delivered its lower cost SeaSpeed Tier 2 from New Jersey to São Paulo with a measured latency of 106.54ms RTD between the exchange centres.

Seaborn manages all six of the fibre pairs of Seabras-1 through its network operations centre (NOC), staffed by Seaborn employees. It has its own disaster recovery NOC, along with control of its Brazil landing station in Praia Grande, and ownership of all six fibre pairs.

SeaSpeed Tiers 1 and 2 are only available from Seaborn through its exclusive channel partner, Spread Networks, to financial industry customers, and are not permitted to be resold or swapped to third parties. Both include latency service level agreements.

CEO John Reid is to leave Liberty Global’s Cable & Wireless Communications (C&W) in early 2018, shortly after shares in Liberty Latin America begin trading.

Reid came into the C&W group in 2015 when it bought Columbus Communications, which he joined in 2005, and stayed after the Liberty Global

Mike Fries: Will support transition to new Cable & Wireless leadership

acquisition in 2016 – though he was described only as interim CEO. C&W is being integrated into Liberty Global’s Latin American and Caribbean division, currently called LiLAC Group but about to be renamed Liberty Latin America.

Liberty Global has not announced Reid’s successor. It “will be made in due course and, until that time, Reid will remain in the post and will support the transition to new leadership”, said the company.

Liberty Global added: “During his tenure at C&W, Reid has driven the transformation of the business to focus on delivering an unparalleled customer experience leading to improved performance and efficiency, as well as the implementation of growth strategies for the company’s mobile, residential, business and wholesale segments.”

Mike Fries, CEO of Liberty Global, said: “John has been an exceptional leader for us, steering C&W through significant changes and transformation; we have valued John’s dedication and energy and wish him the very best for the future.” december/january 2018

latin america | 17

TIM BRASIL OPPOSES CHINA TELECOM’S BID FOR OI

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IM’s Brazilian operation has publicly criticised China Telecom over its tactics surrounding its bid to buy the Brazilian telco Oi. Stefano de Angelis, president of TIM Brasil, was speaking to analysts after the release of its latest quarter results and Reuters quoted him as saying: “We don’t like companies that want to invest in the country putting conditions on the government for those investments.”

However, a rumoured merger with TIM is being reported by local media as a potential strategy for Oi as an alternative to the China Telecom deal.

The news comes after Eduardo Navarro, chief executive of Telefónica Brasil, said that the company was concerned by the entry of state-run companies like China Telecom entering the Brazilian market as they are not responsive to shareholders and warned of the implications of such.

Eduardo Navarro: Worries about China

China Telecom and TPG Capital Management were both rumoured to be in discussions with Brazil’s solicitor general over the potential acquisition.

However, according to local media, they told the government that they will not invest unless until there is a key telecoms reform and the government renegotiates billions of dollars in fines that Oi still owes to its creditors.

Capacity

ARGENTINA MAY LET TELCOS OFFER DTH SERVICES TO USERS Argentina is considering allowing telcos the opportunity to deliver direct-to-home (DTH) services. The news comes as Enacom, the Argentinian regulator, was quoted by Reuters as saying the country “will likely issue a rule allowing telephone service providers to offer satellite television services as part of their packages by the end of the year”.

Beginning in January 2018, telecom providers will be able to offer pay-TV through cable and fibre-to-the-home networks. Satellite technologies will allow operators whose terrestrial networks don’t support video delivery to enter the market.

In addition the government recently hinted at a similar decision based on the outcome of the Cablevisión/Telecom Argentina merger that is planned to take place in December 2018. Though Enacom has yet to give is final decision on the merger, “the country’s anti-trust regulator also would have to approve the deal”, sources told Reuters.

18 | africa

FACEBOOK AND MAINONE TO EXPAND SERVICES IN LAGOS

Kendall Ananyi, Tizeti: Sustainable and cost-effective solution to Wifi services

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ainOne, the Nigerian subsea cable operator, and Facebook have launched a joint development project with Tizeti, a solar-powered mast operator, to expand internet services in Lagos, Nigeria.

The project will use MainOne’s fibre connectivity, Tizeti’s 20 new solar-powered

towers and Facebook’s Express Wifi.

Kendall Ananyi, CEO of Tizeti, said: “Access to fast and reliable unlimited Wifi connectivity has been a problem for most Nigerian residential customers and small businesses for too long. This partnership aims to demonstrate a sustainable and cost-effective solution to the under-served areas of Lagos state through our solarpowered, always-on Wifi towers, and robust internet bandwidth from MainOne.” Funke Opeke, CEO of MainOne, said: “This project leverages our internet capacity, investment in terrestrial fibre infrastructure and points of presence for service delivery across Lagos state. We’re committed to improving the quality of access and accelerating the digital transformation of small businesses.”

Ibrahima Ba, head of Facebook connectivity programmes, said: “We are committed to working with partners across Africa and elsewhere to support Capacity connectivity initiatives and develop better internet infrastructure in communities that lack reliable and affordable access.”

CONGO-TO-GABON SECTION OF $273M CENTRAL AFRICAN BACKBONE READY FOR SERVICE Work has finished on the Congo to Gabon section of the World Bank-funded fibre that will link up seven African nations.

Yves-Didier Miehakanda, the national coordinator for Congo of the Central African Backbone (CAB) project, said that the 520km of fibre will be in service shortly. “[It] will be commissioned at the end of December in the presence of the respective ministers of digital economy of both nations,” said Miehakanda, quoted by the Ecofin news agency.

The fibre runs from Pointe-Noire on the Republic of Congo’s Atlantic Coast north to the border with Gabon via Dolisie and Mbinda. Work on the project started in early 2015.

This section of the CAB cost $30 million of a total put at $273 million.

The CAB is due to link seven countries in five construction phases: Cameroon, the Central African Republic, Chad, Democratic Republic of the Congo (DRC), Gabon, Republic of the Congo and São Tomé and Príncipe.

The Congo to Gabon section is the

Congo’s capital Brazzaville will get a new data centre connected to the CAB

second stage of the CAB, but in 2018 it will be extended from Congo to Cameroon and the Central African Republic.

The project includes a data centre in Brazzaville, capital of Congo – which is directly across the Congo river from Kinshasa, the capital of DRC. The two CAB sections in Gabon and DRC are the most expensive of the project, put at $109 million and $92 million respectively.

ANGOLA TO SELL 45% OF INCUMBENT AND LICENSES NEW TRIPLEPLAY OPERATOR Angola will hold a public tender for a new fixed and mobile operator. Details were due to be published by the end of December, said the government.

The country’s minister of telecommunications and information technologies, José da Rocha, said that by the end of 2017, after this issue of Capacity goes to press, the regulator will have the specifications available for interested investors.

“We are going to increase the competition. It will improve the service and we will work on prices and the quality of the services,” said da Rocha, according to state news agency Angop.

The Angolan state will hold on to 45% of the winning company, he added. At the same time it plans to sell 45% of stateowned fixed operator Angola Telecom, but the government gave no further details of how it plans to put that sale into operation.

The new operator will be able to offer fixed, mobile and pay-TV networks, said da Rocha. It will compete with Angola Telecom and two privately owned companies, Unitel and Movicel.

GHANA MINISTER CALLS FOR SHARED FIBRE TO IMPROVE BROADBAND ACCESS Ghana’s minister of communications Ursula Owusu Ekuful has called on telecoms companies to share their fibre infrastructure to improve broadband access.According to the Ecofin news agency, she has encouraged carriers to develop a sharing code that will protect their interests while ensuring healthy competition and a better consumer experience.

“We have a lot of fibre around the big cities while most parts of the country are not covered,” she said.

“We cannot continue this way. It is very expensive to lay down fibres that remain underutilised.Owusu Ekuful said pooling of infrastructure would improve broadband access and contribute a reduction in the costs of telecos and the cost of the internet.

She was speaking at the opening of the Broadband Ghana Forum in Accra, described as an opportunity to initiate a public dialogue on the most effective method of implementing the national broadband policy. december/january 2018

africa | 19

SOUTH AFRICA’S TELECOMS CHIEF PROPOSES SINGLE WHOLESALE OPEN-FIBRE NETWORK

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obert Nkuna, South Africa’s telecommunications and postal services director-general, has backed the government’s decision to create a single wholesale open-fibre network.

“We are well meaning in what we are doing,” said Nkuna, attempting to reassure the industry of the government’s plan’s and justify its rationale.

“If this industry is to expand, grow and facilitate growth in other sectors, we need some changes. Is the department expecting new companies of the scale of MTN and Vodacom?” he asked. “Maybe not. But our view is, with this intervention, we can have medium-tier companies emerging. These companies will be independent of whoever is providing network and spectrum access.”

Godfrey Motsa, the CEO of MTN South Africa, said: “A slowdown in capital investment in our mobile networks will

Robert Nkuna: New companies will emerge to use network and spectrum

degrade the service and quality of the networks. This will have serious and unintended consequences, including the hindering of economic growth with a

Capacity

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negative impact on job creation.”

Leon Louw, executive director of the Free Market Foundation, added to these concerns by highlighting a clause within the bill that requires mobile operators to return previously allocated spectrum “in which they have invested billions” of rand, and a requirement for mobile operators to provide access to their network infrastructure to competitors at cost-based pricing.

Alf Wiltz, the telecoms department’s chief director, said: “We need to move away from spectrum that is assigned exclusively to the few incumbents and more to a situation where spectrum is shared.”

There are to be hearings on 1-2 February 2018 where all industry players will be able “to explain what it is they are raising”, said Nkuna. All parties have until 31 January to contest the bill in writing.

Capacity

middle east | 21

BEZEQ’S CONTROLLING SHAREHOLDER GIVEN DEADLINE BY BANKS OVER $400M DEBT

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he company that owns Bezeq, Yes and Pelephone has until a week on Monday to pay much of a $400 million debt or risk action for liquidation.

Three banks are threatening a court order if the group that owns the telcos does not pay a “substantial portion” of the debt by 18 December, as this issue was going to press.

The troubled holding company is Israel’s Eurocom Group – which is not related in any way to UK-based Eurocom Ltd. The Israeli company owns a majority stake in Bezeq, Bezeq International, Yes, Pelephone, internet provider Walla, as well as in companies such as Spacecom, Satcom Systems, Eurocom Digital Communications and Eurocom Cellular Communications, according to the group’s own website.

Banks have not accepted an offer from the Eurocom Group and need to agree how the group’s assets are divided.

An earlier plan to sell Spacecom to a Chinese company came unravelled in September 2016 when a SpaceX satellite launcher blew up on the pad.

Eurocom Group has warned shareholders that it “has received a

SpaceX failure destroys Bezeq satellite in 2016, ending plans to sell Spacecom

written communication from banks … in which Eurocom is required to repay a significant debt (including guaranteed debts), within a specified time frame”.

It told shareholders that it “is holding Capacity intensive discussions with the banking system to arrange and spread its outstanding loans and that it intends to continue intensive discussions in order to arrive at agreements within a short time,

there being in its opinion the real possibility of achieving an arrangement”.

However Bloomberg reported that relations between the banks and the group – which owns a controlling 26% stake in Bezeq – “have soured”, and quotes sources saying Eurocom “is acting in bad faith by avoiding requests for documents”, and adds that Eurocom is “arguing it is adhering to all that is asked of them”.

The issue is complicated by a criminal investigation that is going on into Shaul Elovitch, who owns Eurocom Group and is a former chairman of Bezeq. His lawyers have denied any guilt, but the investigation has reached other executives.

In August 2017 police arrested David Granot, Bezeq’s acting chairman. In November an activist investor in Bezeq asked the country’s attorney general to investigate Israeli prime minister Benjamin Netanyahu, who is a personal friend of Elovitch.

As this issue of Capacity went to press there were no updates on how the situation had evolved. However rumours were circulating about private equity interest in Bezeq.

DUBAI-BASED PRIVATE EQUITY INVESTOR BUYS EMIR’S 35% STAKE IN TUNISIE TELECOM

T

he emir of Dubai has sold his 35% stake in Tunisia’s Tunisie Telecom for an undisclosed price, with the Tunisian minister of telecoms saying the deal will help the company’s development.

Tunisie Telecom also owns a controlling 65% stake in Malta’s incumbent operator, Go. The new owner of the stake is Dubaibased private equity company Abraaj Group, which has invested $13.6 billion in restaurants, fertilizer, e-commerce and other businesses around the world. It was founded by Pakistan-born but Dubaibased businessman Arif Naqvi.

The emir, Sheikh Mohammed bin Rashid Al Maktoum, owned the stake through Emirates International Telecommunications (EIT), which is a subsidiary of his Dubai Holdings group.

EIT also owns a 19.5% stake in Dubai operator du, as well as 26% of Middle East distributor Axiom Telecom. It capacitymedia.com

bought the Tunisie Telecom stake in 2006 for $2.25 billion, but neither side has disclosed the purchase price.

EIT acquired its stake in Go in 2006 but transferred the shares to Tunisie Telecom in 2016.

The emir’s investment operation did not say why it was selling its stake in Tunisie Telecom. Until 2015 EIT also held a 30% stake in London-based carrier Interoute, but the emir sold the interest to UK investment firm Aleph Capital Partners and US private equity firm Crestview Partners.

Tunisia’s minister of communications and digital economy, Anwar Maarouf, told parliament in Tunis: “The UAE’s Abraaj became a new partner in Tunisie Telecom to succeed Dubai Holding which sold its 35% stake.”

The minister added, according to Reuters: “The entry of the new partner contributes to the development of the company’s activity.”

Sheikh Mohammed: His EIT sells Tunisie Telecom stake to Dubai investment group

22 | market strategy: net neutrality

MOVING INTO THE FAST LANE?

T

he US Federal Communications Commission (FCC) has voted to repeal the Obama-era net neutrality rules in a 3-2 vote across party lines.

The FCC, led by its Donald Trumpelected chairman Ajit Pai, voted on 14 December to revoke the rules that were created to “safeguard a free and open internet”. These rules barred internet service providers (ISPs) from blocking or throttling lawful traffic or creating fast lanes to prioritise paid-for content.

“What is responsible for the phenomenal development of the internet? It certainly wasn’t heavy-handed government regulation. Quite to the contrary,” Pai said in a statement, just weeks after he had published his draft ‘Restoring Internet Freedom’ order.

According to the former Verizon lawyer, it was President Clinton and the Republican Congress’s decision to adopt a “light-touch” approach to the internet, which resulted in its progress, one that was “unfettered by Federal or State regulation”. During 1996-2015, he said, a staggering $1.5 trillion was invested into the internet.

But in 2015, Pai says the government got it wrong, as the Obama administration “jettisoned this successful, bipartisan approach to the internet” subjecting the internet to “utility-style regulation designed in the 1930s to govern Ma Bell”. As a result, “investment in high-speed networks has declined by billions of dollars”, he said. On 26 February 2015, the FCC ruled in favour

Net Neutrality ends here

of net neutrality by reclassifying broadband access as a telecommunications service and applying Title II (common carrier) of the Communications Act from 1934 as well as section 706 of the Telecommunications Act of 1996 to ISPs. Charter Communications, which has openly backed the repeal of net neutrality in the past, said in a statement: “Our objection to Title II has never been about not wanting to provide our customers with an open internet ... We have been concerned about its overly broad and vague prohibitions as well as the potential for rate regulation. By bringing its approach into the 21st century, the FCC is helping provide regulatory predictability so companies like Charter can be confident in making even greater investments in our broadband networks.”

Capacity

Open internet Pai has stated that as a result of the vote, the FCC “will once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015”. AT&T, Comcast and Verizon have unsurprisingly issued statements of support. Comcast has a dedicated page on its website reaffirming its commitment to an open internet, stressing “we do not block, slow down or discriminate against lawful content”, adding that transparency and customer protection is key.

“Verizon fully supports the open internet, and we will continue to do so.

Our customers demand it and our

Fast lane

business depends on it,” said Will Johnson, senior vice president of regulatory affairs at Verizon.

The biggest concern over the legislation is that a roll-back, which presently stops providers from blocking legal content, throttling lawful traffic or prioritising paid-for content, could have a chilling effect on OTT diversity and could clear the way for ISPs to start charging users.

Companies such as Amazon, Facebook, Google and Netflix have argued that telecom companies may start prioritising their own streaming video services or interfering with messaging apps like Skype or WhatsApp. The backlash to the FCC’s vote has been dramatic. Netflix was one of the first companies to condemn the decision in a Twitter post: “We’re disappointed in the decision to gut #NetNeutrality protections that ushered in an unprecedented era of innovation, creativity & civic engagement. This is the beginning of a longer legal battle. Netflix stands w/ innovators, large & small, to oppose this misguided FCC order.”

Facebook’s COO Sheryl Sandberg took to her personal profile on the platform to express her disapproval: “Today’s decision from the Federal Communications Commission to end net neutrality is disappointing and harmful. An open internet is critical for new ideas and economic opportunity – and internet providers shouldn’t be able to decide what people can see online or charge more for certain websites. We’re ready to work with members of Congress and others to help make the internet free and open for everyone.”

But it’s not just these companies that are threatening legal action. Pai’s plan also blocks state and local governments from imposing their own net neutrality rules and many states in the US are choosing to fight back.

Within minutes of the decision, New York attorney general Eric Schneiderman declared that he would be leading a multi-state lawsuit against the FCC: “We will be filing a claim to preserve protections for New Yorkers and all Americans. And we’ll be working aggressively to stop the FCC’s leadership from doing any further damage to the internet and to our economy.” december/january 2018

Capacity

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26 |

The

softwarisation of PCCW

Global

PCCW Global has bought Console Connect. CEO Marc Halbfinger talks to James Pearce about the acquisition Capacity

I

t’s not a big secret that the wholesale industry is facing major changes.

The growing demand for data services and higher bandwidths, coupled with an increased need for agility, means the industry needs to develop more intelligent ways of transferring capacity.

For PCCW Global, the international operating division of Hong Kong telco HKT, its latest acquisition will give it an opportunity to increase the depth of its capability around software development and agile development.

That, according to PCCW Global CEO Marc Halbfinger, was part of the thinking behind its acquisition in November of Console Connect, which Halbfinger officially unveiled days later at the MEF17 event in Florida.

The transaction involved two parts, with PCCW Global and HKT acquiring Console Connect’s platform, its assets, its intellectual property, as well as its technology team, led by CTO Paul Gampe.

The rest of Console Connect, including its network assets and customer contracts,

were bought by Stephen Wilcox, the former founder and owner of IX Reach, which was acquired by Console Connect in 2015.

After making the official announcement, Halbfinger sat down with Capacity to explain PCCW Global’s plans for its part of Console Connect.

“The brand we feel is valuable. We acquired most the people and they have associated themselves with the brand. The development skillsets we acquired are quite deep, so we’re quite pleased,” he explains.

“Every network-based service provider needs to now increase the depth of its capability around software development, agile development to ensure services can be delivered to end users at the retail level and wholesale level as efficiently as possible.”

So what was Console Connect? The “Cloud Connection Company” was an enterprise software and interconnection company founded in 2011 by Al Burgio.

The company’s sophisticated, highlyautomated connectivity platform provided enterprises direct access to an ecosystem of business-critical cloud infrastructure providers and other

enterprises with the click of a button.

One key asset that is now owned by PCCW Global and HKT is the Console Connect platform, which “provides a platform of value from network to cloud”, according to Halbfinger. For PCCW Global, that could possibly be expanded further, Halbfinger explains.

“We believe that can be expanded to go from network to network, and perhaps cloud to network, depending on the retail distribution channels.”

Connect people Another key consideration behind the deal was the technology team at Console Connect, who joined PCCW Global as part of the transaction.

The team, still led by Gampe, was instrumental in developing the Console Connect platform, and it was their experience and perspective on “development and carrier ‘softwarisation’” that will “help lead PCCW Global to the next of evolution in the network”, he adds.

“Until now in this industry we’ve had network engineers and software developers december/january 2018

the big interview: marc halbfinger | 25

1988

Cable TV, Directories, Cellular, Business Development & Regulatory

1993

Director, Sprint International

1997

VP, Teleglobe

2000

SVP Business Development, Pacific Century Convergence

2001

SVP Europe, Mideast Africa, BTN, a PCCW Company

2006

COO, PCCW Global

2007

CEO, PCCW Global

understand the network and understand the software development elements that now critical for any next-generation service provider that wants to be delivering services network to cloud in an on-demand basis.

They excel in that space and that’s the reason we made this acquisition.”

With big bandwidth videos becoming more critical, PCCW Global trialled a live 360-degree 4K live virtual stream at the Hong Kong Sevens in April 2017. “We didn’t just look to deliver the live stream but to store it. At the 17-minute marker, my team phoned me to update me that we were up to 15Tb of storage and they asked me how much did I want it to continue to?

“This is an indication that, although there are applications that are evolving, the requirements to get to the behavioural insight will require infinitely more bandwidth and infinitely more storage capability and so on that even our early elements today of machine learning and AI capability are still not able to do,” Halbfinger said. “Let’s not get scared that some of the larger players are evolving the model, still bandwidth connectivity, storage

The development Capacity skillsets we acquired are quite deep, so we’re quite pleased”

Marc Halbfinger, Global CEO, PCCW

doing applications,” he adds. “Now what we’re seeing at the core infrastructure is the requirement for there to be software network engineers – people who understand both the IT development side as well as the physical layer. This Console Connect social media is going to be quite valuable for this community – it already is.

All of this, we’ve acquired.”

Halbfinger adds that Gampe’s team is well versed in network orchestration and the software elements that are becoming increasingly important for modern wholesale and domestic networks.

“This is quite relevant as we announce it here at MEF, and MEF is about assuring standards-based orchestration of services from the software layer and the physical layer and for retail distribution services as well as inter-carrier framework, which has always been something that PCCW Global has excelled at the wholesale carrier interconnect,” he says.

“The acquisition positions our depth in agile development for the delivery of services for today and for the next generation. They [Gampe’s team] capacitymedia.com

capability and getting as close to the edge to deliver applications will be critical, including video delivery.”

Console split The deal, which was brokered by the Bank Street Group, was marketed as a joint acquisition between PCCW Global and its parent company HKT. I ask Halbfinger

about HKT’s involvement. “Console provides capabilities relevant to both the domestic network and to the international network, but the effort will be managed by PCCW Global,” he says. “HKT was involved because there was also an interest to see how the development team would be able to provide application of value to also the domestic infrastructure.”

As mentioned, the deal will also see Console Connect split up, with PCCW Global choosing not to acquire its network assets, which are set to become part of a separate business that will be operated as an independent global network platform under the name IX Reach.

So why did PCCW Global opt not to buy the whole thing? Halbfinger says the reason is simple – PCCW Global “does not need the physical network” because it has its own advanced global network, with infrastructure across the Americas, Europe, Africa, the Middle East and Asia, according to its website.

Halbfinger elaborates: “We already had a physical network that was arguably more robust than the one we would have acquired. We felt it was unnecessary to acquire a network we felt we already had.”

That meant customers also moving to the new IX Reach. “Because we didn’t want to take the network, we didn’t take the customers. They are leveraging the platform but sitting on the physical network, so we understood there would be a process. We’ll certainly try to find ways to collaborate.”

I ask Halbfinger to sum up why this deal is important to PCCW Global. He replies: “We’ve been providing services to enterprise for many years. Our mission statement is to provide global connectivity capability of voice, data, video and applications to service providers, multinational enterprises and to cloud. Here we are getting a network to cloud capability that has currently been mostly delivered to enterprises but it certainly also has wholesale capability.”

Bringing together a community One of the key aspects of the acquisition is its senior development team becoming part of PCCW Global, meaning the wholesaler not only gets the code, but the people behind it.

That team is led by former Console Connect CTO Paul Gampe, who joined the company (then IIX) in 2014.

Gampe believes one of the key reasons PCCW Global bought the assets from Console Connect was to “get the code base and the application that we’ve built but they also get a development community that can help to take them further on the journey.”

Explaining the platform, Gampe says: “The

internet is a great vehicle at getting packets from source to destination but it is fraught with challenges. If you’re trying to do realtime streaming or voice applications then you really need the ability to create a dedicated circuit from one point to another.

“What you encounter as you dig deeper into how the internet is constructed is that it is this wholesale network of networks.”

To complete an end-to-end circuit often needs wholesale operators to agree how to achieve it, but “we’re entering an era where the 30/60 day lead time to provision that service doesn’t meet the needs of industry”, Gampe adds.

26 |

Why

‘unknown’ ISQ bought

for

HGC

$1.9bn

A private-equity investor you’ve probably never heard of now owns HGC. Alan BurkittCapacity Gray asks CEO Andrew Kwok about the changes and the opportunities this brings

A

ndrew Kwok is clearly enjoying himself. He’s at last been recognised as CEO of the operation that he’s effectively been running for 15 years. And he’s the acknowledged telecoms expert for his company’s new owner, a US-based private equity company that has bought the business for $1.9 billion.

That was I Squared Capital (ISQ), and you can be forgiven for knowing nothing at all about it. We didn’t either when it was first mentioned in July 2017 as a potential bidder for Hutchison Global Communications (HGC), then the international carrier and local fixed-line business of Hong Kong’s CK Hutchison.

Now, rebranded as HGC Global Communications, the company has started on a new era as an independent operator.

The deal means “we are the showcase to attract more capital into the telecoms industry”, says Kwok. “I Squared Capital wants to make this company as successful as possible.”

HGC operates business and consumer

fixed-line services and public WiFi services in Hong Kong and is an international carrier serving international telecom operators and internet service providers.

It owns and operates an extensive fibre network, including four routes across the border into China that are integrated with the mainland’s tier-one operators. It connects them with hundreds of international operators.

The company says the deal will reinforce its position in Hong Kong and beyond by strengthening its full-fibre infrastructure network to support new technology, such as 5G. It will also invest in valued-added services and innovative solutions, including software-defined applications, integrated cloud and network security solutions for its global customers.

HGC “is not a totally new company”, says Kwok in an interview with Capacity.

The “well-known brand” has largely been retained but there is “a shift of ownership that will bring it to the next level”, he adds.

Why did Hutch sell the operation? Kwok won’t answer the question – he’s no longer with Hutch, of course, and can’t speak for

the former owner, whose origins go back to the nineteenth century.

But instead he points to statements made at the time the deal was announced in July 2017. Then, CK Hutchison said it will use the funds to invest in its mobile businesses – Hutch runs the mobile operations branded Three around the world, from Australia to Ireland.

“It is a pure business decision,” he adds.

But he’s clearly looking at the possibilities ahead. “My investor is supportive of expansion,” he says. “Our mutual position – HGC and I Squared Capital – is that we will grow in whatever way makes sense to the business.”

Market tap Looking at ISQ’s figures (see box, right), the HGC purchase price represents almost a quarter of the funds it had expected to raise by the end of 2017. The same presentation reports other significant investments that are all much smaller: a $285 million pipeline network in New Mexico, a $1.2 billion energy network in Latin America, and a €1 billion electricity december/january 2018

the big interview: andrew kwok | 27

1997

MD, Hong Kong, Macau, the Philippines and Taiwan, Teleglobe

2001

VP and MD, Asia Pacific, Teleglobe

2002

SVP, international business, HGC

2011

President, international and carrier business, Hutchison Telecoms (HK)

2017

CEO, HGC Global Communications

on investment in “traditional infrastructure”, says Kwok, he sees that it is also interested in “new infrastructure on top of traditional infrastructure”.

This seems to fit well with his vision: “With the increasing globalisation, personalisation and fragmentation, our world is entering its ‘fourth industrial revolution’ where we will participate and drive the change,” he says.

There must be a downside to cutting HGC adrift from the rest of Hutch, which has 11 mobile operators around the world as well as a solid industrial reputation in its Hong Kong home. He agrees that “leaving the Hutchison family” has its regrets. “We have to thank them for their past support.

Hutchison is a great company,” he adds.

“Hutchison is still very supportive, even though we are now an individual company.

It’s still a close partner and a supportive customer. There are contractual-binding obligations on both sides. It is not a buyer/ supplier relationship, but it is a mutual

The investment is bringing us into new areas of industry.

It gives usCapacity the opportunity to tap into their markets” Andrew Kwok, CEO, HGC

company in Ireland, plus an unpriced hydroelectric company in the US. “In the ISQ portfolio we’re the first telecoms operator investment,” says Kwok.

But ISQ is investing on behalf of financial investors that focus on infrastructure and, by moving into telecoms, it is introducing a new source of funding to the telecoms industry. And, he points out, “a lot of financial companies are interested in our services”.

But there’s a second benefit, he adds.

“The investment is bringing us into new areas of industry. It gives us the opportunity to tap into their markets.” And ISQ is “introducing us already” to these other sectors. ISQ is “very well connected” and people “are ready to listen a lot”, says Kwok. And the third benefit? The culture, he says. “ISQ treasures people. The philosophy is work hard and play hard.”

All in all he’s looking forward to the wider exposure of HGC to the investment sector and to infrastructure companies, companies that, he hopes, “will treat us as a business partner”.

What makes ISQ tick? Though it relies capacitymedia.com

benefit that has proved to be successful.”

But on the other hand, he agrees, the newly independent HGC “can address a wider market”. How? Kwok is reluctant to be explicit, but says: “We are taking this

opportunity to expand our addressable market.” Perhaps some of Hutchison’s competitors were doubtful about forming business links with the old HGC? This is an area Kwok didn’t want to pursue, and this is simply my interpretation of the background. So let’s move on.

What about the benefits of the transaction to HGC’s customers? “When we completed the transaction on 3 October [2017], we had already promised to all of our customers that we would keep all our commitments, whether verbal or written down. This is still a commitment.”

But there’s another side to potential expansion: acquisition. Kwok again is reluctant to go into detail. “We are revisiting the return-on-investment model – what is short-term and what can be long-term. We have our targets and one thing we bear in mind is that this is a long-term business,” he says.

Even though ISQ is still a young business, it wants long-term investments, “and we want to make this company [HGC] as successful as possible and follow the ISQ criteria”, says Kwok.

HGC’s staff will benefit from this, too, he says, because of ISQ. “We will share success and failure together, and ISQ has a culture of incentivising performance across the company.”

What’s his five-year vision for HGC? “We want to make full use of communications to enable a better life for people.” He’s clearly enthused by the idea of being ISQ’s telecoms person on call.

Does that mean he will be spending more and more time in Manhattan? “It’s already happening – so long as I can put in 48-hour days,” he says, “But I’m happy, as a veteran in the industry, that I will be telling the telecoms story to the financial market and helping to attract new investment.”

IS-who?

I Squared Capital has a rather opaque, onepage website, so it’s hard to find much about it. The only information on the site is a New York address and a list of cities: Houston, London, New Delhi, Hong Kong, Singapore.

Looking deeper, you’ll find a report in Infrastructure Investor magazine that I Squared Capital raised a $3 billion infrastructure investment fund in 2015, and later in the year added $200 million from the US government’s Overseas Private Investment Corporation (OPIC).

The group was formed in 2013 by several former Morgan Stanley executives, including Sadek Wahba, former head of Morgan Stanley’s infrastructure fund.

The second 2015 funding from OPIC was

destined for middle-market infrastructure investments in south and south-east Asia.

According to Infrastructure Investor at the time, Wahba said: “South and south-east Asia infrastructure will require enormous investment in the coming decade to keep pace with economic development.”

ISQ says it is “an independent, employeecontrolled investment platform focused on global infrastructure investments”, and it invests in energy, utilities, transport and telecoms in North America, Europe and high growth economies, such as India and China. It manages assets of $8 billion, including $3 billion from 2015 and $5 billion it is “targeting to raise” in 2017. That’s why the $1.9 billion for HGC is so significant for ISQ.

Capacity

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30 |

PTC: Connecting and

worlds

advancing ICT

As the Pacific Telecommunications Council reaches its fortieth anniversary, Jason McGee-Abe spoke to Tony Capacity Rossabi, CRO of TierPoint and president of PTC, about how the global membership organisation has transformed

T

he Pacific Telecommunications Council (PTC) started off, as many events in our industry have done, as an event to exchange wholesale voice minutes in a location – Hawaii – that brought together people from mainland US and Asia. However, today the PTC is well known as a conference with a diverse set of attendees – it claims there will be 7,000 of them in 2018 – and speakers, representing a variety of disciplines and specialities to connect the worlds of technology, business and regulatory policy; of network-centric enablers with emerging business models, ecosystems, and competitive strategies.

“At its core the altruistic values of the organisation have been founded upon giving back to the community and there’s also a great focus on academia,” says Tony Rossabi, who is serving as president of the PTC through to January 2018.

However, many participants are still not aware that the PTC is a non-profit organisation, founded to raise funds for various activities throughout the year and

initiatives to give back to the community, sponsoring projects for technological developments.

These were primarily in the Pacific Rim, but the PTC is increasingly looking at other regions as it attracts more attendees from all over the world, most notably from Europe, South America and the Middle East. Rossabi admits that “PTC is no International Telecoms Week (ITW), which is in itself a fantastic event”, but it has “morphed itself into a bigger production, and more and more people want to share thought leadership via panels or submitted papers”, he says.

“When I first started attending PTC in the late 1990s, it was about a quarter of the size it is today. I would estimate that there were probably around 2,300 people attending at that time,” says Rossabi.

Conference transformation Changing technology though has totally transformed this conference. “PTC has done a great job of keeping up. It originally started as a place to exchange wholesale voice minutes and today we

have the leading providers of cloud services, TierPoint being one of those. The banking and finance community is there, and a number of enterprises are also coming,” he adds.

PTC has now evolved to thought leadership on subsea cables, bandwidth, mobility and now cloud services, IoT, SDN and virtual networking.

Rossabi joined the board just over three years ago as a member and took over as chairman and president two years ago.

“I’ve been re-elected so I have another three years on the board. I think we’ve educated more and more participants of what the mission of PTC is at this time,” he says. “On my first day on the board, I went round and spoke to 40-50 participants and none of them knew what the mission was and that it was a nonprofit organisation and that it was all about altruistic value and giving back to the community,” he tells Capacity.

“We’ve done a really good job correcting this and we need to figure out how to get more corporate sponsors involved to help deliver the message globally. We’d love to december/january 2018

the big interview: tony rossabi | 31

2006

SVP, global carrier solutions, Tata Communications

2012

EVP, Telx Group

2014

Elected to PTC board of governors, then also PTC President

2015

Managing director, Digital Realty

2017

EVP and chief revenue officer, TierPoint

developments,” he explains. “PTC has changed a lot and many new technology companies are supporting its efforts and have become sponsors. We will continue to operate as a not-for-profit and we want to continue to fulfil the objective we have to our members, secretariat and board.”

So why did he join the board? Rossabi explains his reaons: “The impetus for me to get involved was rally around the community development efforts and how I could help those and help to continue to run a fantastic organisation and raise funds for the continued development in the tech space for the region.”

PTC board meetings are held every month and there is a three-day forum prior to the PTC event where the board discusses overarching global challenges.

“Many of these are centred on how to overcome or address challenges, such as a shortage of bandwidth or even civil unrest,” says Rossabi. The driving factors in all of this are how to make things more

The impetus for me to get involved was really around Capacity the community development efforts” Tony Rossabi, chief revenue officer, TierPoint, and president, PTC

expand to different regions but it’s all about how we get the funds to make that happen.” Rossabi doesn’t see much growth within the conference per se, but there are initiatives that have been rolled out, such as the Spectrum Futures mobile and wireless event held in Singapore.

“We’re looking at launching more educational programmes for the community and we’ll look for input from Africa, Middle East, South America and other regions, as we want to make sure that we’re in the emerging markets as well.”

At the board level Rossabi’s been an active supporter of the PTC for 19 years and since he was elected to his first term on the board of governors back in 2014 that involvement has only been strengthened.

So what’s the board’s focus for 2018?

“It’s to redevelop our three to five-year strategic plan to try and stay ahead of where things are moving. We want to continue the mission of the PTC to ensure that we provide support to the academic community and to young scholars, whilst continuing to focus on community capacitymedia.com

efficient and how to create greater connectivity as content evolves and as we move towards a more IoT-functional society with autonomous vehicles and smart cities.

PTC initiatives I dig deeper to find out more about the initiatives Rossabi referred to at a time of much technogical change in the industry.

He enthusiastically responds: “The most recent one was PTC Academy, which took place this past fall in Thailand. Up-andcoming managers are taught general management skills over one week by industry leaders and veterans. The executives donate their time on a pro bono basis to help mentor.”

PTC Scholar, which is for students who want to get into the ICT world, is another initiative. “There are scholarships and sponsorships to various universities globally and there’s a contest where people write and submit their papers,” he explains. Research paper prize awards are given to recognise excellence in research.

“There’s also the Broadband Reports initiative, which looks at micro markets to

see how we can further develop broadband growth,” says Rossabi. “The conference will become more global in scope and more based on various aspects of the tech space. It will continue to morph itself, and it needs to, to ensure that we keep up with the changing dynamics of technology. We need to constantly improve to stay at the forefront of that,” Rossabi tells me.

Closer to the edge As a participant and also as a board member, Rossabi’s interests lie with how technology is changing and where his company, TierPoint, which he joined in May 2017 as EVP and chief revenue officer, fits in the space.

Ultimately it’s about how the industry gets closer to the edge. “This is a new endeavour for TierPoint, as we’ve been primarily focused on mid-markets, and we realised that as more people want to be closer to the edge it places us right in the middle to be the conduit, ensuring that people are getting signal, connectivity and security, cloud, or managed network services.”

How has Rossabi’s latest role helped him stay at the forefront of technology? “We are seeing incredibly dynamic companies that approach us for their business needs on a daily basis, specifically hybrid IT needs,” he responds. “We see a myriad of different requests as critical data passes through our data centres, private cloud or security offerings.”

Rossabi adds that they are becoming more predictive and bespoke with their offering to be ahead of what their customers may want TierPoint to provide.

“Not always easy – but we have an incredible group of technical experts, product, marketing and operations people, and we try and be laser-focused on the way technology is adapting to new challenges within this space.”

The former Telx EVP and Digital Realty managing director adds: “As we become a more data-driven society and the digital economy continues to grow, one of the areas that TierPoint talks about a lot – and there’s a fairly high emphasis on it – is about the importance of security services, as we believe those are incredibly important to where things are moving.”

We’re speaking a week before Christmas and the PTC event is just around the corner. He’s really looking forward to reviewing the submitted paper applications for funding, sharing thought leadership, taking part in the the board discussions and seeing everyone in Hawaii.

It’ll be the first time I attend PTC and I’m looking forward to the three-day conference and networking. For those who are also going, do get in touch to meet while there. See you in Honolulu.

32 | executive interview: vincent english

PUTTING THE ENTERPRISE EXPERIENCE FIRST Megaport has just added IBM Cloud to its growing list of cloud partners. CEO Vincent English tells James Pearce about how it is tackling the enterprise market

“I

t’s about giving our customers choice. Enterprises want choice of service providers and want seamless and fast connectivity to their services.”

Vincent English, the chief executive officer of Megaport, seems delighted with the company’s latest announcement.

In November 2017, it partnered with IBM to launch direct, secure connectivity to IBM Cloud.

On the partnership, English tells Capacity that its new IBM Cloud Direct Link offering will give “clients who want to build next-generation applications” the ability to have direct, scalable access to cloud infrastructure that is tuned for AI and big data.”

IBM Cloud Direct Link will give Megaport’s enterprise customers the opportunity to accelerate their cloud adoption by enabling them to architect a hybrid environment linking on-premise

cloud strategy that seamlessly connects public and private infrastructure.”

English, unsurprisingly, agrees, saying: “it enriches our ecosystem. I’ve often talked about our one-stop shop for an enterprise where it can access multiple service providers and services through one port, in one location.

“That is really important for an enterprise, not dealing with multiple vendors dealing with whole networking problem of how to build connectivity and take that problem and make it easy to access and Capacity secure those services. It’s a win-win situation for everybody.”

Expanding presence This latest partnership means that Megaport is connected to AWS, Microsoft Azure and Office 365, Google, Alibaba, Oracle and now IBM, covering pretty much all of the major cloud providers. It has a presence in around

During the course of 2017 we continuously worked on innovation with a focus on enriching our ecosystem to make sure we keep bringing more and more partners to our platform” Vincent English, CEO, Megaport infrastructure with private and public cloud services.

The connectivity gives Megaport’s customers access to IBM’s growing global footprint and cloud-native services which include artificial intelligence, blockchain, internet of things, serverless and more. It initially launched in the US and Australia, but will rollout to all of Megaport’s other markets over the coming weeks.

At the time, Kit Linton, vice president of network at IBM Cloud, said the partnership will “provide a reliable way for global enterprises to expand their reach, drive innovation and embrace a

180 data centres across the globe and will continue to expand, he claims.

English explains: “During the course of 2017 we continuously worked on innovation with a focus on enriching our ecosystem to make sure we keep bringing more and more partners to our platform.

That way it becomes a more valuable portal for customers and enterprises o they can access these services. This announcement just adds to that – it’s really exciting.”

So how do English and his team decide where to expand? Where will they focus the innovation in order to get the right services to the right customer? “The

closer we are to an on-ramp location or to connectivity where it presents itself is vital,” he says.

“We work closely with our partners to make sure we are on the front foot on that regard. Ultimately customers want speed but it is also a matter of cost and planning. If you are interconnecting within your region, it reduces the cost of connectivity and gives extra security and performance that you don’t have over longer distances or networks.”

Customer experience For him, the conversation about connectivity is less important in a geographic sense. Instead, English says, the focus for Megaport is on the customer’s need and their experience.

“It is not about a transport layer or networking layer, it is about what the customer wants,” he adds.

“Often you hear people talking about connectivity. We talk about customers first and foremost, and their speed of adoption. We are working very much at the user experience. That is the ability to have a seamless experience when accessing a service provider such as IBM. That’s a unique proposition.”

How did that play out in the discussions with IBM, which had been going on for a few months, he says, to make sure the integration worked instantly?

“It was important to IBM that we had the ability to provide direct connectivity, and a platform that gives instant access to customers. We have taken a networking problem by effectively creating a distribution network for our service partners. That paves the way for global enterprises to expand their reach,” he says.

“We’ve already built the backbone, built the network, and have the connectivity. By IBM coming on to our ecosystem and becoming another option for customers, they then get the ability to have that reach globally and it gives them instant access to customers.” december/january 2018

special report

SUBSEA December/January 2018

CONTENTS 35 Data at the water’s edge Advances in technology mean the cable landing station is being outmoded. Is this the end of the traditional cable landing station?

38 Subsea cable projects We look at some of the most innovative subsea cable projects currently in development

42 GCX tackles Indian telco carnage with bold investment plan Capacity New cable is central to GCX’s plans says CEO Bill Barney

44 SEA-ME-WE 5 - A year on, going strong The SEA-ME-WE 5 consortium reflects on an innovative first year in service

46 Subsea Americas: How have OTT’s affected the market?

OTTs like have changed the dynamic in the subsea market. We asked key figures about their impact

47 Extending Atlantic Ocean connectivity Aqua Comms marks a landmark year by speaking to Capacity

48 IOX Cable is progressing fast Q&A with IOX CEO Arunachalam Kandasamy looks at how the innovative 52Tbps capacity cable will be the first open access cable system in the India and SAARC region

Sponsored by:

capacitymedia.com

Capacity

feature: data at the water’s edge | 35

DATA AT THE WATER’S EDGE Capacity

The end of the traditional cable landing station?

ADVANCES IN TECHNOLOGY MEAN THE CABLE LANDING STATION IS BEING OUTMODED. BUT WHAT ARE THE RISKS AND WHAT IS DRIVING THIS CHANGE? BY NATALIE BANNERMAN

Image: iStock

A

n increasing number of submarine cable projects are forgoing the humble cable landing station and connecting directly into data centres. Low latency, easy access to customers and cost-saving are among the benefits of doing so, but bringing the subsea cable further inland also has its own share of risks.

During the inaugural Subsea Connect Americas conference in Florida, a panel – consisting of Aqua Comms CEO Nigel Bayliff, Xsite Modular CEO Amy Marks, NJFX CEO Gil Santaliz, Digital Realty VP of commercial management and business development Don Schuett, and managing director and senior analyst at RBC Capital Markets Jon Atkin – discussed this very topic and what is driving this change.

According to Schuett, money is the capacitymedia.com

biggest factor when it comes to choosing whether or not to forgo a cable landing station. “I think with the cost pressures of building new [cable] systems, nobody wants to go out and build a brand new cable landing station as they did 10-15 years ago. It’s a very costly endeavour.”

But Marks, whose Xsite Modular is the leading firm for pre-fabricated technology embedded buildings and the designbuilder of modular cable landing stations, is quick to disagree.

“If you look at the cost of the cable station compared to the cost of the cable itself, it is like a decimal point. I can’t understand why people spend all this money on these cable systems and then put it in someone’s supermarket basement, instead of actually providing a cable landing station to protect the data of people on this planet. It is a pimple on

the butt of the cost of these systems.”

NJFX’s Santaliz clarifies Schuett’s previous statement, saying: “The building is not the expensive part, it’s the utilities to get there, it’s the backhaul to get there, it’s the site selection and it’s all the earth you have to move to make it work.”

Capex and opex Schuett adds: “And why would you need to go into a capex model when there’s existing cable landing stations, there’s existing data centres, that can essentially serve the same purpose?”

He continues: “Operators and owners of these new systems are not out to own assets, they’re out to build a network for their own use. They don’t want those assets on their books. They want to operate on an opex model.”

As for Bayliff, it’s all about location

36 | feature: data at the water’s edge

and diversity, he says. “I think all these things depend on where you go,” he adds.

Using his own cable as an example he explains: “In Ireland (Killala) where our cable (CeltixConnect) lands, there is nothing there. There is a small town and an old aluminium bauxite smelting plant, which is why we have heavy-duty power from both directions on the grid. But it is four and half hours from Dublin and the nearest data centre is a good 200km away, as well as the fibre backhaul.”

Overall, he says: “It is about closeness to the beach. You don’t want to be taking your high voltage power, which in the case of the Atlantic about 1,200 volts DC wrapped around a fibre optic cable, too far inland because if somebody comes along and starts digging it’s not the same as your regular 110 volts.”

As the conversation progressed, a term that came up repeatedly was “hardened infrastructure”. Speaking about cables being extended inland to connect directly into data centres and being more vulnerable to risks, Atkin explains how these concerns form part of the decision making process at the investor stage.

“Physical security and reliance on hardened sites is well placed,” he says. He believes the newest cohort of data centres are resilient and up to the challenge.

“During super storm Sandy there was not a single data centre in New Jersey that had a customer outage. All the outages that one hears about were the older ones where you had diesel fuel pumps in the basement that failed. All of the newer ones were fine.”

Market drivers

Speaking to Capacity, Larry Schwartz, chairman and CEO of Seaborn Networks, explains that he thinks the shift in the market is a positive thing.

“Where there is a pre-established, well-populated data centre that can serve the role of landing station plus POP, then it makes sense.”

As for what’s driving it, he says there are two factors. One, “we can run over 10,000 kilometres without landing the cable in between, and can go from termination point to termination point.

That can make for a more reliable system with fewer active elements.”

The second factor is “to push costs down and make these more affordable projects. So the combination of technology improvements and lower cost serves the industry very well,” Conversely, Artur Mendes, COO of Angola Cables, thinks that the customer is the one driving this change. “In our case our cable in Angola is in a data centre. We are also building a data centre in Fortaleza and use a data centre as a

cable landing station in Boca Raton and that’s because essentially our customers are directly in the data centre,” he says.

“If you are finalising at a data centre, you are at a cross-connect distance from the other guy. So it’s quite simple to just order a cross-connect and interconnect with the other customer on a different route. When you are at a landing station it is not as simple as that because most customers don’t have access to the landing station, so you need to pay for backhaul to connect. It’s a lot more complicated to do.”

But Paul Scott, president of C&W Networks, says: “I think in developed countries, there’s a greater density of data centres. But let’s face it, in some of the emerging markets there’s not an abundance of ready-to-go data centres sitting in an appropriate location suitable to land a cable in.”

He adds: “So I don’t think it’s either-or.

It’s what does the landscape look like at a given country and what can I avail myself of if there’s a hardened world-class data centre that’s not too far from the beach.”

He’s quick to say that in most circumstances for C&W the cable landing station is the most feasible option. “But Capacity more often than not I think, one has to look at purpose-built cable landing stations or terminal point that might just be a modest facility that’s carrier grade [and] bullet-proof but then seamlessly connects on to that data centre which might then hub a bunch of activity,” he says.

“I think combinations of that are the reality and practicality there’s not a bunch of data centres to pick and choose from in emerging markets in the areas we play in. We have a bunch of data centres of our own, which are multi-use facilities.

It just all depends.”

Marks agrees. “None of us are representing the under-developed

markets that actually need cable landing stations, because there isn’t a data centre there. There’s plenty of the world that isn’t in a place where they can choose which data centre to go to, because they don’t have one, and we have to provide cable landing stations for them in those locations, just for them to be able to have connectivity. So as the world changes, yes we might be moving towards this new developed model, but there’s so much of the world that’s not there yet.”

Neutral waters It was Santaliz’s last argument that poses the most innovative solution to reviving the cable landing station, one that requires a little collaboration.

“I think the initial conversation about what’s changing in the model is not the physical attributes of the cable landing station. What’s changing is: why can’t we have a cable landing station that’s neutral? Why can’t one have two subsea cables and let each operator have independence of each other and operate in a neutral fashion?” he asks.

“And why can’t the real estate owner stay out of the way? Help them out in terms of power and cooling, but just stay out of the way. Don’t get in their business, don’t compete with them and don’t get into the business of operating a cable or connecting to other sites.”

What was most telling was Santaliz’s final point, perhaps revealing a bit of the strained relationship between the cable operators and the owners of the landing stations themselves.

“Neutral to me means you don’t compete with the guys you serve. So I don’t compete with my customers.

Therefore how can I help you? I don’t have a hidden agenda, in terms of when I connect you to someone or you to someone else, I’m thinking about how this is going to hurt my other business.”

Left to right: Nigel Bayliff, Amy Marks, Gil Santaliz, Don Schuett and Jon Atkin take part in the panel at Subsea Connect Americas, debating the end of the traditional cable landing station

december/january 2018

Capacity

38 | analysis: subsea cables

SUBSEA CABLE PROJECTS Capacity

WITH A NUMBER OF SUBSEA CABLE PROJECTS ANNOUNCED IN 2017, CAPACITY LOOKS AT SOME OF THE MOST INNOVATIVE ONES IN THE PIPELINE DEEP BLUE CABLE SUBSEA NETWORK Length: 12,000km Planned Capacity: Eight fibre pairs with an initial capacity of 6Tbps, and ultimate capacity of approximately 20Tbps per fibre pair Locations connected: British Virgin Islands, the Cayman Islands, Colombia, Curaçao, Dominican Republic, Haiti, Jamaica, Panama, Puerto Rico, Trinidad & Tobago, Turks & Caicos Islands, and dual diverse landings in the US, on the Gulf Coast of Florida Companies involved: Deep Blue Cable (developer, owner and operator), TE SubCom (cable builder), Digicel (equity partner and anchor tenant) Projected ready for service: Q2 2020

QUINTILLION Length: 2,250km Capacity: 100Gbps Locations: Alaskan coastal communities of Utqiagvik, Wainwright, Point Hope, Nome and Kotzebue.

Companies involved: Quintillion, Alcatel Submarine Networks Ready for service: Stage 1: December 2017

Deep Blue Cable’s project is an attempt to overcome C&W’s monopoly in the Caribbean by offering an alternative route running between the islands and the US. A route survey is expected to take place in Q1 2018, with manufacturing expected to take place into 2019, and the cable due to go live in Q2 2020.

MONET Length: 10,556km Capacity: 64Tbps Locations: Boca Raton, Florida; Fortaleza and Praia Grande, Brazil.

Companies involved: Algar Telecom, Angola Cables, Antel, Google, TE SubCom Ready for service: December 2017

The first stage of Quintillion’s innovative arctic cable went live in December 2017, connecting remote parts of Alaska through a combination of subsea and terrestrial fibre. Eventually, Quintillion plans to extend its cable west to Tokyo and east to London.

Commercial traffic is shortly set to go live on the low-latency 10,556km Monet submarine cable connecting Florida to Brazil. The Monet cable has been built using SubCom’s Open Cables concept, providing the consortium with choice and flexibility in the selection of line cards.

HAWAIKI Length: 15,000km Capacity: 43.8Tbps Locations: Sydney, Auckland, American Samoa, Oahu, Pacific City Companies involved: Hawaiki, TE Subcom, Equinix, AWS Hawaiki is the new carrier-neutral submarine cable linking Australia and New Zealand to Hawaii and mainland United States. The cable has also some industry heavyweights involved in its planning, including Equinix, which will be the landing point on the Australian side, and AWS which has purchased capacity in Hawaiki Submarine Cable. december/january 2018

Capacity

Capacity

Capacity

42 |

GCX tackles Indian telecoms carnage with bold investment plan

A cable from China to Europe and new investments in Mumbai are among GCX’s plans to set it apart from the Capacity troubled Indian mobile business.

Alan Burkitt-Gray interviews GCX CEO Bill Barney

T

he international unit of Reliance Communications is planning a new 100G subsea cable stretching from China to India to Europe. The new cable, to be built by Global Cloud Xchange (GCX), the international cloud and carrier unit that is owned by the Indian telco, will be called Eagle and will be part of the group’s Cloud and Fibre Initiative, announced in November. It will be ready for service in 2020, says Bill Barney, chairman and CEO of GCX, who is also CEO of Reliance Communications (RCom).

But at the same time RCom/GCX is recasting itself. It is getting out of the troubled Indian mobile business, where oversupply of operators has driven down prices to an unsustainable level, and is focusing on enterprise communications and data centres in the Indian market and subsea cables in the global market.

GCX already has a global cable network, but the oldest part of that is Flag – originally Fibre-Optic Link Around the Globe – which went into commercial

service in 1997. “We’ve had the largest capacity sales in our history this year, particularly from India to the Middle East,” says Barney. “And from Europe we see an absolutely huge demand, particularly from content players. It’s probably the best time in our history to build this and fund it.”

He’s confident that GCX will get the business, comparing the sales performance on two of its previous cables: Falcon, which links the Middle East and Egypt with India; and Hawk, which connects Europe with the Middle East and Egypt.

“For Falcon we were 130% oversubscribed when we hit the water. Hawk was 80% oversubscribed.”

Hottest in decades Over the next few years the subsea cable business is going to be “the hottest it will be for the next few decades”, he adds. And that’s especially the case for a company centred on India, which is seeing a booming demand for internet access – thanks, in large part, to the arrival of Reliance Jio. That’s not connected to

RCom, except that each is owned by a different son of the late Dhirubhai Ambani. One, Anil Ambani, counts both RCom and GCX among his operations.

His older sibling, Mukesh Ambani, runs Reliance Industries, which launched Jio in late 2016 with rates so low they have caused carnage throughout India’s mobile industry (see page 6).

“India is now the largest user of bandwidth in the world,” says Barney. “It was fifth before the arrival of Jio, but it’s now the largest. Nearly half the world’s population is reachable within a short distance from India’s borders, giving India a strategic edge in the new digital era.”

The new cable will be split into two parts: Eagle East, running from Mumbai to Hong Kong, with a number of branches, and Eagle West, running from Mumbai to Sicily via the Red Sea and Egypt.

“We will be fully operational on both legs by 2020, with our customers pushing for an early date. These systems can be built quickly these days.” Eagle will have fewer landing stations than Flag. That helps speed of delivery, he says: “Providing december/january 2018

the big interview: bill barney | 43

1997

President, South Asia and Middle East, Global One

1999

CEO, Asia Pacific, MCI

2002

CEO, Asia Netcom

2006

CEO, Pacific Internet

2007

CEO, Pacnet

2014

CEO, GCX

2016

Co-CEO, RCom, plus CEO, GCX

says Barney. “They’re pushing to increase the bandwidth. Most cables were sub10G, but new cables are 10G and are 100G-enabled.”

There are hotspots around the world that have lots of capacity, and areas that don’t, he notes, comparing the capacity available in Hong Kong with “the entire Middle East”. He also points to Turkey and eastern Europe as areas with less capacity than they should have.

Better fibre connections to poorly connected places with low-cost labour will help boost the service economy, he adds.

“The service economy will chase lowercost labour – and fibre and data centres will chase right behind.” That’s one reason fibre is going to India, the Philippines and Latin America, he adds. “It’s the human factors. Africa will open up as well, but Africa is probably the last stop.”

OTT providers have started to invest in subsea cable. “They’re in a land-grab now,” says Barney. But the opportunity for them could be “fleeting” as new cables are laid.

“We’re seeing more and more video on our platforms and that requires massive

Most cables were Capacity sub-10G, but new cables are 10G and are 100G-enabled”

Bill Barney, CEO, GCX

power to each location can be a problem.”

Who’s building it? “Vendors will be announced when we’ve picked them,” is all he’ll say. “We’re in the process right now.”

Eagle “will help triple the size of the company by the next decade”, says Barney.

“It will create synergy with our existing cables”, because it will be easier to do restoration and maintenance. “It means in three or four years we will have duplication across all our cables.”

Who’s going to use Eagle? GCX has two letters of intent and three on the way, he says. He’s aiming to have three to announce by the time of the Pacific Telecommunications Council conference in Hawaii in late January.

New technology Technology has advanced significantly since those cables of the late 1990s and early 2000s. There were dot-com bankruptcies and not much new investment. “Now we have new technology players such as Ciena and Infinera, and a lot of the advances come from the over-the-top [OTT] players,” capacitymedia.com

infrastructure investment.” This investment was always picked up by carriers in the past, but will the content companies take it up? “It partly depends on the US net neutrality rules,” he says.

Meanwhile GCX continues to expand its footprint in that other element of infrastructure that Barney knows is essential to the new service economy: data centres.

The company, along with its investment partner, is planning to announce its new Mumbai data centre project in early January. It is, he says, “a world-class data centre” that aligns with its recently announced Cloud and Fiber Initiative.

“This new facility will be a key India data centre hub with direct connectivity into our planned Eagle express subsea cable system,” Barney added.

It’s not been officially announced so far because of the challenges that are affecting all of Indian mobile communications at the moment. GCX’s parent company, RCom, is in the process of unwinding from the mobile business to focus on the enterprise market. “We didn’t want to make a lot of announcements while we were going through the process with RCom,” he says. “Many people wouldn’t

understand that we were two businesses.”

But now “there is a lot more clarity in the market”, he adds. So what’s happening at RCom? “It’s a restructuring exercise we’re going through. It all started last year when Jio launched free data. Since then four operators have exited the market. Anyone with less than 15% market share is finding it difficult to continue.”

Before Jio came into the market, RCom’s enterprise business, plus the data centre operation, plus GCX accounted “for 15-20% of the entire company”.

Now RCom is trying to sell off its towers, spectrum and mobile activities, and Barney hopes that it will all be over by March 2018. “The new company that will emerge from this is GCX,” he says.

Shift in the market With its base in Mumbai on the west coast of India, GCX is trying to shift the market away from Chennai, on the south-east coast. “OTT companies were focused on Chennai,” says Barney.

But Eagle and other investments mean Mumbai’s fibre footprint will get much better. The new network will be four/six fibre pair systems with initial design capacity of 12-24Tbps per fibre pair. Eagle East will be 7,750km long, with landing points in Singapore and other branching units from Mumbai.

The Eagle West map shows a single link from Mumbai to Italy, 8,900km long, but GCX says there will be “diverse routing and landing points within the Mediterranean and low latency subsea routing from Europe to India and beyond”.

The company claims that the new system will be the fastest Mumbai-toHong Kong route, avoiding the outageprone Malacca Strait. In addition, GCX says Eagle will also be the fastest submarine route between India and key technology centres across the Middle East and Europe.

Barney says: “We’ve got our eyes on the emerging markets, where there will be opportunities.” For data centres too, he hints. “If we were able to get into Riyadh or Cairo we would look at it.”

The Eagle investment and the yet-to-beofficially announced Mumbai data centre investment are intended to mark a new start for GCX and for a slimmed down, enterprise-focused RCom. Meanwhile the carnage across the whole Indian mobile industry continues. There have long been too many operators competing for business, and Reliance Industries’ funding of Jio has focused minds on the need for consolidation.

GCX and RCom’s enterprise business have a new focus. Whether that ends years of sibling rivalry in the Ambani family is a completely different question.

44 |

SEA-ME-WE 5: GOING STRONG, A YEAR ON ǧ ǧ ͹

ÇĄ

Right from the start, the SEA-ME-WE 5 Palermo from 148 to 124ms. Such key cable showed its potential. Straight after improvements offer a significant edge in going live a year ago, it started to become a highly competitive market. loaded with heavy traffic – indicating the Flexible and open need for this type of system on that route.

One of SEA-ME-WE 5’s key differentiators Dubbed by the 19-member strong has been its highly flexible and open consortium that runs the 20,000km nature, with the provision of easy access cable as a “matchless, PoP-to-PoP, multito carrier-neutral international points of regional data superhighway�, the network presence (PoPs) through fully protected was completed last December. It connects terrestrial extensions from cable landing 17 countries across three continents, from stations onward to these destinations in the Far East and on through South Asia Marseille and in Singapore, as well as a and the Middle East to Western Europe. carrier-neutral PoP in Italy.

It represents the fifth generation of a series Capacity This means the core network is of intercontinental cable systems that terminated in major PoPs and virtual began in 1985. meet-me rooms rather than in landing The strong group of members behind stations, allowing cross-connects with SEA-ME-WE 5 has already delivered other cable systems and interconnection positive results over the past year. “The Abdullah Alsamhan, chairman of the between carriers in a competitive system has helped alleviate the dependence management committee at SEA-ME-WE 5 environment. It also further boosts on existing cables, and allowed greater competition by offering a greater choice voice and data traffic between regions. of capacity providers than has traditionally The project has been a success story right from its inception and continues to make headlines in the been available on submarine cable systems, with the ability to buy industry,� says Abdullah Alsamhan, chairman of the management from various operators rather than just the landing-station owner. “A major thing that makes SEA-ME-WE 5 different to many committee at SEA-ME-WE 5.

Designed with the latest upgradeable 100Gbps DWDM other cables is that this is a real PoP-to-PoP system,� says technology, Alsamhan says SEA-ME-WE 5 provides the “highest Alsamhan. This means it gives members a kind of free choice quality� voice, data and internet traffic, with minimal transmission on where they would like to terminate their capacity in the core delay. The flexibility and scalability of the network, as well as its system. Consortium members can also drop traffic where they like ability to be remotely configured, have also helped to keep opex along the network, including in any branches, based on bilateral agreements between parties. This offers a high level of flexibility in down, he says.

In addition, the cable has provided much-needed extra capacity terms of where consortium members use their capacity entitlement between regions. “SEA-ME-WE 5 has eased the strain on the across the system.

At launch of the system, about 100 x 100G waves were lit on heavily loaded networks that connect Western Europe, the Middle East, East Africa and Southeast Asia,� says Alsamhan, “as well the network in all PoPs in Singapore, in Palermo and in Marseille as offering an extra layer of network and further enhancing the from different stations. The second light-up for the network is diversity and resilience to the heavily loaded Asia-Middle East- now under way and is set for completion around March 2018, increasing the number of initially lit waves by 75 WLs in all Europe route.�

Aside from this, there has been a massive surge in demand for PoPs from different cable stations in those locations, in line with capacity in burgeoning global markets such as countries in the increased intensive usage.

Most of the consortium members have activated a high proportion Far East, creating a growing need for extra capacity options. SEAME-WE 5 also offers major cross-connection possibilities with of their lit capacities, says Alsamhan. Meanwhile, planned ongoing other submarine cables in countries such as Egypt, Saudi Arabia, light-ups of the system are expected to make it more cost-effective Djibouti and Sri Lanka – creating the promise of many exciting for all consortium members and even more competitive.

SEA-ME-WE 5 had an initial design capacity of 24Tbps, which opportunities.

And on top of all that, latency on the new network has dropped by is easy to upgrade by deploying the most advanced transmission tens of milliseconds compared with earlier SEA-ME-WE networks technology such as 200G SLTEs, because the smart design of the between major end points. For instance, between Singapore and network is able to quickly adopt any new transponder technology.

Marseille the latency has significantly improved compared with the Some parties have already used a high percentage of their capacity previous network from 163 to 135ms, and between Singapore and from year one, says Alsamhan.

capacity

december/january 2018

SPONSORED STATEMENT

| 45

All in all, he says, the system has established itself as highly flexible, through facets such as its reach into carrier-neutral PoPs and its cross-connection possibilities. “All these flexibilities have led to faster and higher system utilisation, and provide diversity and resilience,” says Alsamhan. It is also well-placed to meet the high level of demand created by digitisation. This is important given the huge rise in use of services and applications in areas such as the internet of things (IoT) and machineto-machine (M2M) communications.

High-class connectivity The SEA-ME-WE 5 PoPs in Marseille and Palermo hold the promise of access to high-class connectivity to major European cities, as well as interconnection opportunities with major transatlantic and West African cables.

Meanwhile, aside from the major markets, an increasing number of Apart from the clear advantages of the cable already outlined, waves have been lit up at other ends of SEA-ME-WE 5, such as new access points to Europe in Marmaris in Turkey and Djibouti the appearance of SEA-ME-WE 5 has also been a boon for the in Africa. These offer interesting alternative options to landing telecoms market in that it has led to a “tremendous” price drop for capacity. stations in the traditional major markets.

Capacity Competition will be even further enhanced as other cable systems The access point in Turkey effectively provides a third route into Europe from the hotspots of Italy and France. For players seeking to get a foothold in the market too. This type of competition between target locations away from markets such as London and Frankfurt, major cables will be healthy for the future of the industry, helping and plot a path through up-and-coming markets in regions such as to not only further improve prices, but also the quality of networks as that becomes an ever more important factor in gaining an edge.

Central and Eastern Europe, this offers a shorter route.

The make-up of the consortium behind the SEA-ME-WE 5 In turn, the submarine pathway offered by SEA-ME-WE 5 provides redundancy for certain terrestrial routes – which is cable, meanwhile, certainly provides plentiful reassurance and the important given that earthquakes can present a hazard along some promise of reliability for those looking to make use of the network.

This is because it involves team members who are major players in of these, leading to potential cuts.

Indeed, this avoidance of natural hazards was also built into the the industry and have a track record of delivering results through design of the cable’s pathway. “The SEA-ME-WE 5 cable route was the successful completion of previous large-scale and complex SEAdeliberately designed to avoid areas prone to earthquakes and other ME-WE projects. These parties have provided strong commitment hazardous areas,” says Alsamhan. The result, he says, has been that and support for the new cable, driving towards getting it up and the cable has encountered fewer subsea faults than otherwise – running and spurring usage.

“The system has successfully relied on a strong commitment and with the good histories of previous SEA-ME-WE cables on similar partners in all regions, proven financial stability and recognised routes providing further reassurance. technical know-how from its consortium members,” says Alsamhan.

These are all qualities that without doubt offer promise for the Added protection Meanwhile, the network itself uses technology that provides extra future, given that the foundation of a strong, robust, reliable cable layers of protection against potential faults and problems. This will always be the team behind it.

ROADM technology protects the core against cable cuts on the branches of the network, with the ability to enable flexible rerouting of waves between the core and the branches. So combined with the deliberate positioning of the cable in a relatively secure area, this THE 19 SEA-ME-WE 5 offers even more of a defence against potential issues.

MEMBER COMPANIES And not only does the technology help with these kinds of issues, but it enables the consortium to efficiently utilise the Bangladesh Submarine Cable Company Limited (BSCCL), China fibre spectrum. “Using ROADMs, SEA-ME-WE 5 members can Mobile International (CMI), China Telecom Global (CTG), China quickly alter the branch’s capacity into the core and vice versa, as United Network Communications Group Company Limited (CU), needed,” points out Alsamhan.

Djibouti Telecom, Emirates Integrated Telecommunications As a professionally managed project that has kept to all the Company (du), Myanmar Post and Telecom (MPT), Ooredoo, Orange, deadlines and expenses within its planned budget, SEA-ME-WE PT Telekomunikasi Indonesia International (Telin), Saudi Telecom 5 won the Best Subsea Project award in 2016. The cable also won Company (STC), Singapore Telecommunications Ltd (Singtel), Sparkle, Sri Lanka Telecom PLC (SLT), Telecom Egypt (TE), Telekom the Best Subsea Innovation award in 2017 for being one of the Malaysia Berhad (TM), TeleYemen, Turk Telekom International (TTI) most ambitious and successful cable projects, applying the most and Trans World Associates (Pvt) Limited Pakistan (TWA). innovative technology to connect three continents (Asia, Europe and Africa). capacitymedia.com

46 | feature: OTTs

Subsea Connect Americas:

HOW HAVE OTTS AFFECTED THE MARKET? GOOD, BAD OR INDIFFERENT, OTTS SUCH AS FACEBOOK AND AMAZON HAVE CHANGED THE DYNAMIC OF THE SUBSEA INDUSTRY. IT WAS THE TOPIC OF CHOICE FOR ATTENDEES AT THE FIRST SUBSEA CONNECT AMERICAS CONFERENCE IN FLORIDA, REPORTS NATALIE BANNERMAN

M

ike Cunningham, CEO of Crosslake Fibre, described “the supply side, the top-line/sales side and the finance side” as the three silos for any new subsea cable builds. Gabriel Holgado, VP of the global account division and wholesale services in Latin America at Level 3 Communications – now CenturyLink – discussed the capacity price erosion happening in Brazil. But one topic that kept coming up throughout the Subsea Connect Americas conference was the emergence of over-the-top (OTT) providers and the influence they are having on the industry.

The surge of OTT players entering the submarine cable market has increased over the last few years – with one of the most recent announcements being Amazon and Facebook joining a consortium of investors that includes SoftBank, NTT, PLDT and PCCW Global on the 60Tbps Jupiter submarine cable system linking the US with Japan

Artur Mendes, Angola Cables: Most carriers believe OTTs will affect them negatively

and Philippines. Speaking exclusively to Capacity Larry Schwartz, chairman and CEO of Seaborn Networks, says that OTTs have impacted the market “in a positive way”.

“I think they’ve been great at leading the growth of new-build systems,” explains Schwartz.

“They’re obviously the biggest consumers of global transit these days and I think they are opening the door for new business Capacity models around these types of projects, which I think is always welcome. They set the stage well for a player like Seaborn Networks to play an ever increasing role on other projects on other routes.”

Lots of money Interestingly, Artur Mendes, COO of Angola Cables has a different perspective on the matter.

“There are different types of discussions from people who think, yes it’s helping, because there is lots of money being invested in the subsea industry,” he says.

“But it’s not clear how that will impact the operators. Most of us believe that it will affect us negatively, because there is capacity you’d now sell to OTTs. [In the future] they will use their own cables, so you’ll lose that business.”

He says that because of the way the OTTs have been developing these projects “is creating some noise between the operators”. He explains: “Typically they use one operator, to take care of the operation, maintenance and the local licences etc. So that operator could be in a different position from the other ones and may or not have a controlling monopoly in the region.”

TE SubCom, one of the key builders and providers of global undersea communications technology, says that the introduction of OTTs has changed the way we think and therefore create submarine cables as a whole. In a

company statement to Capacity, the company said: “The increased involvement of OTT providers is significantly changing the market. It has transformed the way we think about capacity from being a ‘product’ to being the means of delivery for a product (content applications).”

TE SubCom continued: “It has also changed the usage of subsea cable from a resale model to one of internal consumption. All this has had the effect of breaking down significant regulatory barriers and breaking up some monopolistic business paradigms.”

Paul Scott, president of C&W Networks, thinks like Schwartz it’s a good thing, but highlights that due to the disruptive nature of OTTs it was unlikely for them to stick with the status quo.

Certainly on a global stage are making an impact, he says, “particularly with the intensification of their participation in and investment in subsea cables. To date they’re following more of the traditional engineering profile of the subsea cable.

I’d wait for the day they’d bring that DNA of theirs, which is of a disruptive nature, challenging why this way – why not that way?” says Scott.

“I don’t believe we’ve seen the impact of that yet. We certainly haven’t seen OTTs invest in the Caribbean with subsea cable yet.”

Xtera’s founder and chief sales officer, Robert Richardson, observes that a change in the landscape through the involvement of OTTs is the biggest impact of them all.

“It’s changed the whole model really.

We’ve moved from carriers being the purveyors of long-haul bandwidth to the OTTs doing it themselves. With a whole new focus, it’s really disrupted the market. I understand that if the FCC’s net neutrality thing comes [see page 22] carriers will then have control of access,” says Richardson. december/january 2018

SPONSORED STATEMENT

| 47

EXTENDING ATLANTIC OCEAN CONNECTIVITY IT HAS BEEN A LANDMARK YEAR FOR AQUA COMMS, FORGING IMPORTANT NEW RELATIONSHIPS AND MAKING PLANS FOR FRESH INFRASTRUCTURE DEVELOPMENTS. Aqua Comms, the Dublin-based provider of carrier neutral infrastructure services, has struck two major deals that leverage its advanced subsea cable assets as well as extend its own international reach.

In October it was announced that PacketFabric, which operates a ground-breaking SDN platform in the US, would be extending its European footprint with Aqua Comms’ AEConnect subsea cable system.

AEConnect delivers connectivity from New York to Ireland, with diverse backhaul fibre to numerous PoPs in the US and the UK. It is the most-advanced ‘next-generation’ undersea cable system linking the two continents.

PacketFabric, which specialises in enabling real-time connectivity services between major carrier-neutral colocation Capacity facilities at terabit-scale, will now be able to offer nearinstantaneous access to transatlantic capacity on AEConnect from any location on its private and secure network.

“Leveraging AEConnect to establish end-to-end highcapacity transatlantic connectivity extends the reach of our Nigel Bayliff, CEO, Aqua Comms network to provide more customers with scalable, reliable and secure access to network and cloud environments in the US as well as internationally,” says Jezzibell Gillmore, SVP Business cables move their data from our campus to key landing points in Development & Co-Founder of PacketFabric.

Europe,” says Gil Santaliz The partnership also gives Aqua Comms access to the Founder and Chief Executive Officer at NJFX. “Having Aqua PacketFabric platform, allowing it to extend the reach of its Comms at our colocation campus enables customers to further service footprint across the US. PacketFabric’s scalable network diversify and plan their international connections with certainty facilitates coast-to-coast connectivity between more than 150 and accuracy, eliminating any transport uncertainty.” premier colocation facilities across 17 US metro markets.

On-demand connectivity Back in May, Aqua Comms and international wholesaler Epsilon joined forces to provide on-demand connectivity to NJFX, a carrier neutral colocation facility located in Wall, New Jersey.

NJFX is the only colocation campus to sit at a cable landing station and offer Tier 3, carrier neutral data centre capabilities.

NJFX customers will now be able to strategically diversify their connectivity options to key European hubs, bypassing legacy chokepoints within the US. Aqua Comms is deploying a PoP within the campus, allowing NJFX customers to directly access the carrier’s suite of services without incurring cross connect fees. The arrangement between Epsilon and Aqua Comms will see the deployment of Epsilon’s Infiny on-demand connectivity platform within the NJFX facility.

Aqua Comms will use the Cloud Link eXchange (CloudLX) module of Infiny to interconnect new services in and out of the NJFX campus. Aqua Comms’ customers can thus benefit from interconnecting with NJFX’s growing ecosystem of global carriers, network operators, enterprises, cloud providers, and internet exchanges.

“What makes NJFX unique is its carrier neutral subsea capabilities, so customers have options when choosing which capacitymedia.com

New plans Aqua Comms is underway with plans to extend its own footprint.

It already owns and operates CeltixConnect-1, a 72-fibre pair subsea cable connecting Ireland and the UK. Now it has begun to develop CeltixConnect-2, a subsea cable system that will cross the Irish Sea from Dublin to Manchester and connect to the Isle of Man. CeltixConnect-2 is designed to complement the reliability of CeltixConnect-1. The new cable system, which will provide onward connectivity to New York and London through AEConnect, will utilise the most advanced fibre-optic technology to support the highest transmission capabilities, including 8QAM, 16QAM and beyond.

Aqua Comms is also in preliminary stages of development with North Sea Connect, which will be the first modern, high capacity subsea cable system crossing the North Sea from Newcastle UK to Denmark.

It additionally has plans to expand available connectivity to AEConnect at its Point of Presence (PoP) at 1025Connect in Westbury, New York, a critical subsea cable launch point on Long Island. It will also soon increase the system’s footprint by opening service capabilities in Ashburn, Virginia to better serve expanding and new customer requirements.

48 | SPONSORED STATEMENT

IOX CABLE SYSTEM IS PROGRESSING FAST INNOVATIVE 52TBPS CAPACITY CABLE WILL BE THE FIRST OPEN ACCESS CABLE SYSTEM IN THE INDIA AND SAARC REGION Q1. How is the 8,850km IOX Cable system developing?

The IOX project is on schedule and is progressing fast. The last one year has been very hectic and busy for us. We finalized our supplier in the middle of the year after a lot of deliberations and negotiations and got on board our first anchor tenant later in the year. Last month we went CIF and the work for the cable has started. We are in line to give Mauritius its third cable by 2019.

will get a new route in the southern hemisphere where they can connect continents very efficiently through the IOX system and our partnerships. Eventually through our cable and partnerships we will connect Asia to Africa, Europe, South America and North America, creating routes that were not there before.

Q3. How much design capacity, per fibre pair, will this system have and what plans are in store to develop this?

The Cable has design capacity of 13 Tbps per fiber pair and the total designed capacity of 52 tbps. We are ready meet the growing demands of our customers and derive more capacity from the cables

Q2. When will the system, which is being built by Alcatel Submarine Networks (ASN), scheduled to go live and how will it benefit the carrier community?

The work has already started, and the cable will be in Service by Q4 2019. This is our target and as we speak we are in line to meet Capacity Q4. The IOX Cable system will be the first open these dates. access cable system in the region, how important is Our Cable has a very interesting route and is offering different this for the India & SAARC region? things to different geographies and customers. For Mauritius, Open access as a policy is something that we are very passionate we are offering a high speed, open access submarine network about and we will ensure that we are offering this to all our that will bring abundant and resilient capacity to boost the customers in our home markets. India and SAARC are very economy. We will also be connecting to Rodrigues island where important geographies for us. We will be a full-fledged enabler there is currently no submarine cable, and this will transform of operators in the region and all our partners can enjoy seamless the connectivity and economic landscape for the island. South and easy connectivity onto the network and we will be providing Africa will also get its first direct route and shortest route to Asia them with diverse connectivity to reach major hubs globally. and connectivity to fellow BRICS nation. For India, we have a Overall it will be a new route to exit the subcontinent and get the multi layered proposition where we are connecting the Indian required diversity that is much needed. sub-continent to Africa and beyond. Also, all global carriers Q5. You recently signed a strategic partnership with Seaborn Networks, what will this new relationship bring?

We are very excited about our partnership with Seaborn Networks and what it brings for our customers. Currently, India access the internet content in the US via two routes. One is from Mumbai into Europe via the Suez Canal and then onwards to the east coast of US over the Atlantic and the second one is from Chennai to Singapore and onwards to Japan and then to the west coast of the US via the Pacific.

Through our partnership with Seaborn we will be providing a completely new route for India where our customers can go from Puducherry to South Africa on the IOX cable and then connect to SABR and Seabras-1 which will take them to New York on a completely diverse route from the existing ones.

Arunachalam Kandasamy, CEO, IOX

Q6. What other alternative global routes are you looking at investing in to interconnect key emerging markets?

Our Phase 2 plan is to connect Mauritius with Seychelles and Kenya and give a new route into the east African market. On our plan is also to further connect into Asia and onwards into Europe to ensure that our customers can experience seamless and end-toend connectivity on our network. december/january 2018

special report

SECURITY December/January 2018

CONTENTS

50 GDPR: Know the rules With companies facing fines up to 4% of their global turnover, the EU’s new data protection rule is important for service providers across the world

52 NTT Com’s network security roadmap Michael Wheeler, EVP of Global IP network at NTT America, gives Capacity an inside look on its evolving DDoS protection services offering

Capacity 56

Security: maintaining peak practice Christmas, Black Friday and Cyber Monday all mean a drive in online activity at this time of year.

But what is the impact on carrier security?

Capacity investigates

58 Market data Corero DDos trends report

60 DDoS anxiety? Keep calm and carry on Nokia on how a new generation of multi-dimensional analytics and router silicon is being recruited to eradicate the threat of cloud and IoT-based DDoS attacks

Sponsored by:

capacitymedia.com

50 |

Capacity

WOULD YOU BE ABLE TO PAY A FINE THAT’S 4% OF YOUR GLOBAL GROUP TURNOVER? EUROPE’S NEW DATA PROTECTION RULES ARE IMPORTANT FOR SERVICE PROVIDERS ǥ

ǧ

E

urope’s new law on data protection comes into operation on 25 May 2018. If that’s what you believe, sorry, but you’re wrong.

The EU’s General Data Protection Regulation (GDPR) is already in operation. What happens on 25 May is that the law becomes enforceable. If what you’re doing now is against GDPR, you can’t sit it out and hope to get things right after the end of May. This is one of the top concerns of Adrian Brookes, director of solutions engineering at Tata Communications: “A lot of people are very much in the dark about the dates.

It was the first thing our legal department said: don’t wait until 25 May.�

Neil Coulson, partner at law firm Baker Botts, agrees, saying: “If you’re doing something now, then it’s highly likely you’ll

be continuing to do it after 25 May.�

Why should you worry? You’re a carrier and all you do is transmit other people’s calls and data without looking at it. Not really. If you are doing business in the EU (including the UK) you will have data on employees and customers who are EU citizens. That means you are bound by the GDPR, even if you are in the US, India, China or anywhere else.

But isn’t in the same as the existing EU data protection law, with a few extra punishments? Again, not really. Says Coulson: “Privacy by design is the concept that GDPR enforces. Now you have to design privacy into your operations. Any decision that requires personal data needs a privacy statement.�

Colt’s new chief information security officer, Ashish Surti, adds: “What’s new is

mandating privacy by design. That is a strong requirement. We’re embedding that into the business lifecycle – for every new product. If we’re making IT changes and organisational changes, we have to consider GDPR if any person is being impacted. We have to make sure we’re compliant.�

Uber data breach In November 2017 Uber revealed that details of 57 million customers and 600,000 drivers had been stolen in a data breach more than a year before. It paid $100,000 to the hacker in 2016 on the promise he or she would delete the data.

Under the new EU law Uber would have to disclose such a breach to the relevant European national data protection office within 72 hours. Not three working december/january 2018

Image: iStock

feature: GDPR | 51

days, and no allowance for weekends or public holidays.

The penalties for GDPR breaches will be severe. Valerian Jenny, counsel at Bird & Bird in Frankfurt, warns: “The fine is up to €10 million or 2% of turnover. If it’s a more serious incident, twice that.”

Lee Suker, market development director at XConnect, notes that there are additional penalties, “compensation for non-material damage” for people whose data is stolen. “Citizens are entitled to compensation under the law,” he says.

“They don’t have to prove guilt: enterprises have to prove innocence.”

Sounds like at opportunity for some class actions by lawyers for groups who have suffered from breaches. “Anecdotally, I’m aware of lawyers building such cases,” says Suker.

That fine is 2% or 4% of a group’s global annual turnover, not of a divisional turnover, and not of profit. What does that mean? Uber is still heavily lossmaking, but its latest annual turnover was $6.5 billion, making it susceptible to a fine of $260 million if GDPR penalties had been in force.

Verizon, which now owns AOL and Yahoo, had a global turnover in 2016 of $126 billion. If another AOL and Yahoo data breaches were to occur in June 2018, the potential penalty could be up to $5 billion.

Verizon may be a classic telco, but its expansion into other areas mean it is subject to GDPR. And if there isn’t GDPR, there’s something else on the horizon in the EU: the E-Privacy Regulation. The EU already has the E-Privacy Directive, sometimes known at the cookie law. It’s why in Europe whenever we go on to a new website we have to consent to cookies on our computer or phone. The E-Privacy Regulation will strengthen that and it will be followed by a new Electronic Communications Code.

Ann LaFrance, a partner in the London office of Squire Patton Boggs, runs the firm’s communications law practice and co-chairs its global data privacy and cybersecurity group. “Telcos have will be to deal with the E-Privacy Regulation being debated in Brussels right now, and it will take definitions from GDPR,” she says. “You will have to look at the two together – and also at the Electronic Communications Code. If you are classified as an electronic communications provider you must get consent.”

She warns: “GDPR and the E-Privacy capacitymedia.com

is XConnect doing? “A lot of education,” he says. He needs to be able to demonstrate that there’s an audit trail for information at the point it comes into XConnect, during the company’s processing of it, and at the point it goes out to a client company.

What does it mean in real life? Let’s take you, the Capacity reader, as an example. If you are reading this in a printed magazine that arrived through the mail, or if you’re attending one of our events and picked your copy up there, we have your data – as we do if you clicked a link in our daily email news or in a mobile app.

That means we, as part of the larger Euromoney Institutional Investor information and events group, are subject to GDPR for your data. So I asked our director of information risk, Martyn Booth, what an enterprise has to do.

“Transparency is one element,” he says.

“We have to publish our privacy policies and you should be able to find them on our websites – with details of where to go if you want to do something about it.”

Personal data has to be encrypted, not just when it comes Capacity into the company and goes out, but internally. “Most Ann LaFrance, Partner, Squire Patton Boggs people don’t encrypt in their internal network,” says Booth. “Personal data has to be encrypted.” domain wherever you can. That means One of the challenging areas is the right finding out if the called number is also to be forgotten. “People can ask to be VoLTE-capable. Similarly, if you run an deleted – and that means permanently,” he IPX service, you’ll need to know what the says. That means everywhere, throughout destination is capable of. the company, including back-up tapes.”

Subscriber information And there’s incident management, he Take the new rich communications service adds. “We need to show we’re capable of (RCS) standards. If a customer sends an managing those issues.”

RCS message, do you pass it on – or Surti at Colt is acutely aware of the deliver it – as RCS, or do you drop down 72-hour reporting rule when there is an to SMS standard? What about application- incident. “We need to ensure our crisis to-person (A2P) messages? management processes keep to the To do that, you need information about timeline,” he says. “We have a 24/7 the subscriber – including where they are operation that we run and if a crisis were now, what network they’re on, what sort to occur we have to ensure we have the of phone they have and what services they people and the processes to make sure subscribe to. That’s personal information, we comply.” and is subject to GDPR. It will be expensive. Brookes says Tata XConnect is positioning itself as a Communications has “recruited an repository of this information, so it can additional 400 people right throughout offer it to mobile operators and wholesale the business”, but “security is absolutely operators. “The backdrop is abuse of your paramount”. data and my data,” says Suker. “Go But he adds: “I would just keep stressing download an app and you have to agree to the importance not because of punitive a lot, including your location and your damages, but because it’s the sovereignty contacts. This whole notion of transof people’s data. If you don’t take it parency is very disruptive. I want to help seriously, what does it mean about your enterprises come to me with rich appliattitude to customer data? It’s your cations along with A2P services.” So what customers’ integrity.”

Regulation and the Electronic Communications Code will apply uniformly across Europe.”

The EU wanted the E-Privacy Regulation to come into operation at the same time as GDPR, but things are running behind schedule. When will it apply? “Maybe the end of 2018,” says LaFrance. “It’s still controversial.”

In the current draft, users “must consent to the use of traffic data or location data”. Telcos that want to monetise data for other purposes must get consent. “It’s putting telcos in quite a difficult position,” she adds.

Suker has perspective on this. XConnect started as a number portability company for the voice-over-IP market, but is expanding into new areas. “My role is to move number information services beyond number portability,” he says.

What does this mean? If you run a mobile company that offers your customers voice over LTE (VoLTE), it’s in your interest to carry calls in the IP

Telcos will have GDPR, the E-Privacy Directive and a new E-Communications Code”

52 |

Behind

NTT Com’s network security roadmap

Michael Wheeler, EVP of the NTT Communications Global IP Network at NTT America, spoke to Jason McGee-Abe to discuss Capacity how automation is the final piece of the puzzle for its DDoS Protection Services (DPS) offering

T

he first day of the Capacity Asia conference saw NTT Com announce the launch of an upgraded detection solution, DPS Detect, to enhance its distributed denial of serviceDDoS protection services.

I booked in some time with Wheeler in NTT Com’s meeting room, which overlooks Hong Kong from the fortieth floor of the Conrad Hotel.

We immediately discuss the news that customers of NTT Com’s global IP network can now select the level of mitigation support that best fits their cyber security strategy, helping them to detect potential attacks directed to their networks and initiate mitigations faster.

The new DPS Detect solution option provides an advanced level of service above DPS Core as it adds detection capabilities to help identify potential attacks using state-of-the-art technology while working with customer-defined thresholds.

“Network security is one of the top priorities for our company,” starts Wheeler. “As DDoS attacks continue to

grow in frequency, size and complexity, it is important to give our global IP network customers more solution options and the opportunity to choose the level of support they need.”

As customer requirements have evolved, and the types of frequency of attacks have grown, Wheeler says there is a real need to further expand the product in terms of features and functionality.

Subscribers to DPS Detect also have access to the Network Security team and enjoy exclusive use of the company’s DPS Portal, a platform where they can request or self-initiate mitigations based upon a DDoS detection alert, review past mitigation reports, and request configuration changes. “DPS Detect goes deeper into how customers can interact with our infrastructure, letting them trigger their own mitigation as opposed to going through NTT Com’s own network security team,” he adds.

DDoS attacks can strike at any time, potentially crippling network infrastructure and severely degrading the performance and reachability of a website

or other IP-accessible assets. The expanded DPS suite of services will enable global IP network customers around the world to easily customise the level of service and assistance that best fits their needs, which can vary vastly.

The DPS roadmap Expanding the product line has been carefully planned as part of a roadmap developed by NTT Com around one-and-a-half years ago, Wheeler explains. NTT Communications first launched its original DDoS protection services product and since then it has slowly evolved. “Fast-forward to today and we’re seeing another phase of our roadmap being rolled out.”

DPS Control is an entry-level tier of service that provides support on access control lists (ACL) and is intended for customers that don’t require full mitigation assistance. Using the service, customers can define permanent ACLs which are deployed on its NTT Com interfaces to block a network from certain types of traffic as defined by the customer. december/january 2018

the big interview: michael wheeler | 53

2000

Principal, StreamGroup

2002

Director of business development, NTT Communicationss

2004

VP, sales and business development, NTT Communications

2009

EVP, head of global IP network buiness unit, NTT Communications

and access control lists, are designed to support multi-threat security environments on a single best-in-breed platform, with sufficient capacity to combat large-scale attacks.

Wheeler says that it was feedback from its customers coupled with where the company saw the industry is heading towards that were the catalysts to developing the DPS offering. About one-and-a-half years ago we took a step back to take a look at what we needed to do and that’s when we put a comprehensive roadmap together for the overall product as a family as opposed to a singular product.

There’s no one-size fits all solution and in many instances, companies are using two or three mechanisms to address DDoS attacks. “In the old days the easiest way was for someone to have over-capacity,

When we’re able to include the automation components that’ll make things even Capacity better” Michael Wheeler, EVP, head of global IP network business unit NTT Communications

“We developed the Core tool as we had heard from some of our biggest customers that they needed something that was scaled down, essentially that didn’t have all the bells and whistles but still had the functionality that they had in the original product, Core, to help provide for things like Act Control Lists (ACLs),” the NTT EVP adds. “That was relatively easy so the rollout and implementation was fast as it just required some restructuring from a product capability point of view.

In turn, DPS Core, is an enhanced level of service beyond DPS Control for customers that require full DDoS mitigation support. DPS Core is supported by NTT Com’s Network Security Team, the same expert team responsible for keeping the company’s tier-1 global IP network (AS2914) infrastructure safe and secure.

“Prior to this there were some tools which were free of charge and provided to customers, including blackhole routing,” he says. NTT Com’s complete suite of proactive DDoS attack solutions, that also includes blackholing capabilities capacitymedia.com

doing it out of pure volume. So they would buy more capacity than needed so if an attack came through the volume wouldn’t affect them. That was a very simplistic different time for network security compared to what we have today,” Wheeler recalls.

“It’s not just purely about volume, although it can still be a big cause for concern, but there’s a lot of precision that occurs with attacks today that did not occur before. That’s not a fail-safe option that works for everyone, particularly in an age with multi-vector attacks or more sophisticated attacks with smokescreens. That will inevitably continue, but that’s the battle you fight as a network provider.”

Automation: the missing piece NTT Com has developed a product family here but how is it going to be enhanced further? “Automation,” Wheeler quickly responds.

DPS Detect is really a number of steps into that progression in providing enhanced services, more self-control for the customer and more visibility to what NTT Com is doing from a network

infrastructure point of view in regards to DDoS mitigation. “But we have another product that’s part of the same roadmap that we aren’t announcing yet, but it’ll be a further step into much higher levels of automation between our infrastructure and a customer’s infrastructure,” Wheeler says. “That’ll be an even deeper enhancement and set of capabilities that customers don’t have today even with Detect.”

I ask if the fourth tier of its roadmap, the auto-mitigation tool, will be launched in time for ITW 2018 in Chicago and Wheeler says “things are on track and that is certainly a possibility”. “So in 2018, we’ll have four tiers of DDoS mitigation services for our customers and they can pick the appropriate capability and functionality based on whatever their profile requirements are as a customer.

When we’re able to include the automation components that’ll make things even better.”

Separate from this product, over the last year NTT Come has deployed new infrastructure and enhanced the overall capability and ability to manage capacity volumes. “There’s been a 400% increase in scrubbing capability that has been added globally,” he adds. This enhancement has taken place over the past three quarters and there are still some more pieces of infrastructure to be deployed.

Wheeler is adamant that it won’t rest on its laurels and reveals that the company has already started collaborating with NTT Security and looking at more predictive capabilities.

“We’re pretty happy where we are in that process, customer feedback has been very positive and we’re close to beta trials for the fourth product,” he says. “These are being developed concurrently not sequentially as part of the roadmap. But we’re not going to sit back now, we’ll go from strength-to-strength.”

NTT Com’s sister company, NTT Security, works with the back-end and is looking heavily at more machine learning and AI capabilities. “That collaboration is something we would like to explore and perhaps push the envelope on regarding enhancing the product, its capabilities and perhaps services that we could provide customers which are predictive in nature,” Wheeler says. He admits that it is not close but it’s certainly a possibility.

As NTT Com pushes ahead with enhancing its security options for its customers, it is also still keeping its flexibility. DPS Detect is yet another way that is helping Wheeler and his team to differentiate themselves in the market and we look forward to seeing the details of next auto-mitigation capabilities rolled out.

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Capacity

56 |

MAINTAINING PEAK PRACTICE

As shopping activity surges at this time of year, what is the impact on carrier security?

Gareth Willmer looks at the issues

Capacity

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t’s that time of year again, when shopping goes into overdrive. The rise of online activity for events such as Black Friday and Cyber Monday, followed by the Christmas period, creates a massive surge in internet traffic in some countries.

The figures suggest that online sales in the US alone topped $5 billion this Black Friday (24 November), and e-commerce giant Alibaba reported sales of $25 billion during China’s Singles’ Day on 11 November.

It may seem that such surges, during which fears of cyber attacks on shoppers and retailers can rise and telecoms infrastructure might already be under stress, would logically pose a heightened threat to the security of carriers and their networks too – especially given the rise in distributed denial-of-service (DDoS) attacks alongside the growth in the internet of things (IoT). But how much of an impact do such days really have on carriers’ security?

Telecoms carriers tend to say their

networks are already built to cope with surges in traffic throughout the rest of the year for events such as big sporting occasions and new product launches, meaning they are well-placed to deal with security demands no matter what day it is.

And the wide-scale, often global reach of major players aids insight into traffic.

Chris Richter, VP of global security services at CenturyLink, says there is sometimes an uptick in cyber attacks during events such as Black Friday and Cyber Monday – though there is not necessarily a direct, verifiable correlation between increased traffic and attack attempts.

“We do sometimes see a spike in that kind of activity around the holiday season,” says Richter. He explains, for example, that the heaviest recent DDoS activity in the last couple of years has been on 26 December, when many people both shop in online sales and start up their new gaming devices after Christmas.

Richter says CenturyLink’s network is,

however, already well-prepared, without having to make special plans for these particular events. This is because it is set up to deal with heightened traffic and large volumes of attacks, mitigating between 100 and 120 DDoS attacks every day. “We’re an organisation that handles more than 1.3 billion security events every single day and we’re also monitoring and reporting on over 3 million computer systems every day across our customer base,” Richter adds. “We have to be at a heightened state 24/7.”

So Richter claims that while such events pose a heightened threat to many retailers, which need to make adjustments to cope with seasonal spikes, CenturyLink itself does not necessarily see any greater threat to its network or services.

In addition, if the US carrier’s threat intelligence platforms detect suspicious activity and predictors of attack that threaten customers, it can help customers prepare in advance for these. The company december/january 2018

feature: holiday security | 57

has, meanwhile, been stepping up the application of machine learning for attack prediction, and has a large network of scrubbing centres and products such as its Adaptive Threat Intelligence service for enterprises and wholesale customers that offers global threat analytics to identify attack patterns.

AT&T reiterates this ethos of vigilance throughout the year in its own practices.

The company applies the same rigour with threat detection and pre-emption efforts on these high-volume shopping days as on any other day, says Brian Rexroad, VP of security platforms at AT&T. “There are significantly large numbers of important transactions every day of the year that also deserve a high level of attention.”

Rexroad acknowledges that there is some increase in transactions during events such as Black Friday and Cyber Monday, but says this is not particularly notable given the overall capacity of the network, with an average of 186 petabytes of data crossing AT&T’s network each day.

“There is no increase to security threats during the surges,” he explains. “There is some increased probability that attackers might attempt to disrupt transactions to attract attention, but this scenario is generally rare.”

Increased attention Nonetheless, he claims AT&T does increase its level of attention to any security events that might impact commerce transactions, and is sensitive to any perceived changes in network traffic during the holiday season.

Rexroad says the company’s DDoS mitigation capabilities allow attack traffic to be filtered and scrubbed in an automated fashion, without customers having to deploy or manage any infrastructure.

At BT, meanwhile, Steve Benton, GM of cyber and physical security operations, says the company has well-practised and prepared “playbooks” to deal with any issues with traffic peaks throughout the year – and that peaks during major shopping events are not out of line with those that BT sees across the year.

“We are scaled to be able to cope and flex with that,” he says, with other surges around sporting events and things such as new iPhone launches. And he points out that commercial entities also seem to have started spreading their offers more across the year to help minimise potential issues.

Across security as a whole, BT is seeking to take an ever-more in-depth view. “We are very much shifting towards a big data approach to security, so we are using our cyber security platform, which is a modular big data architecture that draws in lots of information from across our enterprise, enriches it, correlates it, and allows us to find those interesting things capacitymedia.com

that need to be looked at more deeply,” says Benton.

Although major carriers believe they are already well equipped from their past experience to deal with surges during big shopping events, they also think retailers themselves need to be on the alert for issues.

From its previous research, Verizon says it has not witnessed significant spikes in cyber activity around the retail space during these peak times – “but obviously more shoppers purchasing online or in store increases the number of opportunities that may be presented to cyber criminals”, says Laurance Dine, managing principal for investigative response at Verizon.

Keeping vigilant The company therefore has recommendations for retailers to protect against breaches – although highlighting that these apply at all times rather than just in the holiday season.

These include vigilance about evidence of device tampering, using the latest methods to encrypt data, and ensuring robust policies for processing customers’

many other events that create increased traffic that carriers are used to handling,” says Mike Sapien, VP and chief analyst for enterprise services in the US at Ovum.

“There may be some slight increase in threats due to the volume, but I don’t believe it is directly proportional.”

Facing challenges Vitaly Mzokov, solution business lead at cybersecurity company Kaspersky Lab, says, however, that although Kaspersky has no evidence of, for example, more DDoS attacks on these specific days, major surges in traffic can pose a threat to telcos.

He adds that cyber incidents during events like Black Friday have demonstrated “that telecoms providers are still in the process of reviewing their own concepts of providing both reliable and secure infrastructures for enterprise-level customers”.

On the other hand, says Mzokov, Kaspersky’s detection data on financial malware and financial phishing has recently showed no major variation between the number of attacks on Black Friday, Cyber Monday and Singles’ Day

Capacity

There are significantly large numbers of important transactions every day of the year that also deserve a high level of attention”

Brian Rexroad, VP of security platforms, AT&T

payment cards. Verizon helps customers put these into practice through professional services consultants and security teams.

Verizon, meanwhile, plans to continue evolving its security offering in 2018 to make it even more embedded in its platform – offering more end-to-end managed security infrastructure for the network, developers and applications.

“In today’s threat landscape, it’s all about global scale – but openness and information sharing to combat the bad guy, both online and in the real world, will also become the norm,” adds Dine.

Like other carriers, though, he stresses that “we see the ongoing security of our network as a crucial component every day of the year. Security isn’t a one-off activity; it is an ongoing process.”

A number of industry observers also say that carriers are well accustomed to dealing with surges aside from those on these peak shopping days. “There are

compared with the rest of the year.

Meanwhile, Steve Wallage, managing director of BroadGroup Consulting, says that from a data centre perspective, heightened traffic has the potential to cause a headache for data centres, where he says server utilisation is often at a level of about 10% – so there may be some concern if this peaks. However, historically the main concern has been performance and the risk of outages rather than cyberattacks, he says.

Ultimately, one key message seems to be that carriers need to remain proactive to stay ahead of the game. This type of approach can be summed up with the way that AT&T is moving in this area.

“To continue to pre-empt attacks, we are accelerating our own pace of innovation, aggressively implementing automation to minimise threat exposure, and advancing managed security service offerings to help customers protect themselves from threats,” says Rexroad.

58 |

THE GROWING THREAT OF DDOS ATTACKS CORERO NETWORK SECURITYâ&#x20AC;&#x2122;S CUSTOMERS EXPERIENCED AN AVERAGE OF 237 DDOS ATTACK

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rganisations around the globe have become increasingly dependent on the internet as a means to conduct business, and the internet-connected world has grown more complex due to faster throughput, larger connections, the internet of things (IoT), and public and private clouds.

Simultaneously, distributed denial of service (DDoS) threats have become more sophisticated and common. Internet reliability can come down to a fraction of a second; since its inception, the internet has been all about availability. When the internet goes down, businesses that rely on that service go down with it, and DDoS attacks are considered one of the most serious threats to

internet availability today. Downtime or latency significantly impacts brand reputation and, ultimately, revenue.

When you combine the frequency and duration of attacks, and the low volume, sub-saturating nature of the threats, victims are faced with a significant security and availability challenge.

Automated, real-time mitigation techniques must be in place to eliminate the repercussions of a DDoS attack. This report contains observations from DDoS attack attempts against Corero customers in Q2 2017 and Q3 2017, as well as comparisons with previous quarters. The data represents the frequency and sophistication of DDoS attacks that organisations face today.

TRENDS Increase in frequency

Capacity

We have just passed the first anniversary of what many believe to be one of the largest DDoS attacks recorded. Domain name service provider Dyn came under attack by two large and complex DDoS attacks against its managed DNS infrastructure.

Because of the attacks, dozens of internet platforms and services â&#x20AC;&#x201C; including major brands such as Twitter, Spotify, Reddit, Netflix and others â&#x20AC;&#x201C; felt the significant ripple effect of service outages.

Since that incident, other various large-scale DDoS attacks have made national or global headline news. However, those large-scale attacks are atypical of the types of disruptions that companies suffer from day to day. Frequent, modest-sized, short duration DDoS attacks are the modern-day problem, as they regularly cause the most damage. Itâ&#x20AC;&#x2122;s these types of attacks on which businesses should focus.

Corero has observed a jump in the frequency of attack attempts against customers. In Q3 2017, Corero customers experienced an average of 237 attacks a month, an increase of 35% compared with Q2 2017 (175 attacks). Worryingly, Corero saw an average of eight attack attempts per customer per day in Q3 2017 â&#x20AC;&#x201C; double what was observed in Q1 2017.

Low volume, short duration attacks While the frequency of attacks is concerning, the size and duration of attacks are also important to call out. Roughly 96% of mitigated DDoS attacks were less than 5Gbps in volume, in both Q2 and Q3 2017.

The average duration of DDoS attacks is also cause for concern: 65% of attacks in Q2 2017 lasted 10 minutes or less, and in Q3, 71% were 10 minutes or less.

While attacks lasting five minutes or less make up the majority of the attack attempts, we noticed that attacks lasting 21-30 minutes dropped by 50% (Q1 versus Q3).

december/january 2018

market data | 59

Attack types Corero has observed a wide range of DDoS attack types over the last two quarters. Two distinct attack types stand out: 1. Sophisticated, multi-vector attacks, aimed to deceive and overrun traditional IT security measures made up a significant portion of the attacks observed this year.

2. Service flood attacks aim to saturate the bandwidth target victim, resulting in service outages, downtime and latency.

Cyber-criminals are also switching methods, from simple volumetric attacks to multi-vector DDoS attacks. Modern toolkits can launch both infrastructure-based and application-

based DDoS payloads, and attacks include SYN flood, UDP flood, domain name system query flood and GET floods.

Attackers are implementing techniques to profile the nature of the target network’s security defences, and using subsequent techniques to implement second or third attacks designed to circumvent an organisation’s layered protection strategy.

Multi-vector attack attempts are used (figure 1, below left) against Corero customers. We see service flood attacks as shown in figure 2 (below right) comprised TCP or UDP attacks such as SYN flood, ACK flood, reset flood and so on.

INSIGHTS

RECOMMENDATIONS

RDoS

Understand the evolving threat landscape

Ransom denial of service (RDoS) made a significant comeback The sophistication of DDoS attacks continues to evolve, with in Q3 2017. A widespread wave of RDoS threats from the multivector attacks being used more often than not. These Phantom Squad hacker group kicked off in September. These attacks are used to profile existing security solutions and Capacity threats targeted companies throughout the world. This infrastructure, to probe and determine which vectors and extortion campaign demanded Bitcoin payment, with promise techniques will prove successful. These attacks are also to attack on 30 September unless the demands were met. sophisticated enough to leave just enough bandwidth available Most cyber security solutions focus on recovery from for other cyber-attacks to make their way undetected into the criminal extortion attacks, rather than defeating one. DDoS network. mitigation technology has evolved to deal with these attacks.

IoT botnets should be a grave concern IoT devices are usually poorly managed, patched and secured.

These connected devices can be harnessed by hackers for a variety of nefarious purposes; in many cases hackers use them to form a botnet to carry out DDoS attacks. The latest IoT botnet plague making headlines is the Reaper botnet. At the time this paper was written (Nov 2017) the botnet was in the recruitment phase, and security experts have yet to see an attack. Its potential scale and power has the ability to create internet chaos and dire results for target victims.

DDoS distraction; data exfiltration Once a DDoS attack is underway, security personnel are often distracted by the DDoS traffic, which allows hackers to use whatever means at their disposal to penetrate a network or plant ransomware or malware. Such attacks are not designed to deny service, but to deny security, by acting as a camouflage that masks more sinister activities.

Talk DDoS with your ISP

Organisations that once had DDoS protection projects on the back burner are now re-prioritising their security strategies.

This shift in precedence puts increased pressure on internet and cloud providers to enable this protection for their customers, and eliminate DDoS threats closer to the source.

Providers are now accepting a greater responsibility for defending their customers and networks against DDoS attacks.

Real-time threat detection and mitigation Proactive DDoS protection is a critical element in proper cyber security against loss of service availability and data breach. The everyday DDoS attack cannot be properly defeated with traditional internet gateway security solutions such as firewalls, intrusion prevention systems and the like.

Similarly, cloud based DDoS scrubbing alternatives cannot achieve successful mitigation with the low volume, short duration attacks that are impacting organisations every day.

Time-to-mitigation must be a critical factor.

Source: Corero DDoS Trends Report, Q2-Q3 2017 Ǥ

60 |

DDOS ANXIETY? HOW TO KEEP CALM AND CARRY ON IN THE ERA OF CLOUD AND IOT

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Ǥ Coming on the heels of the DYN attack that disabled much This is because without additional context to complement raw of the internet and affected access to major sites like Twitter, tonnage measurements, it is difficult to determine if a surge is a Amazon and Netflix, the recent discovery of the REAPER bot real attack, or a valid event like a large file transfer from Amazonâ&#x20AC;&#x2122;s sent shockwaves through the Internet and webscale communities.

AWS. This can lead to false positives and negatives, with genuine It crystalized the growing concern that they are dealing with new attacks allowed to pass, and valid application traffic stopped in its weaponry that is providing DDoS perpetrators with far greater tracks. Scrubbing center analysis helps, but it comes at a great cost power, and its driving a rethink of DDoS defence architectures. in infrastructure, and it consumes precious time whilst the attack â&#x20AC;&#x153;If you donâ&#x20AC;&#x2122;t â&#x20AC;&#x2DC;fear the REAPERâ&#x20AC;&#x2122;, you shouldâ&#x20AC;? says Tony rages on.

Kourlas, director of product marketing for Nokiaâ&#x20AC;&#x2122;s Deepfield and What is needed instead is a faster, more precise way of detecting Carrier SDN businesses. â&#x20AC;&#x153;This is not just another example ofCapacity attacks so that the vast majority of attack traffic can be quickly hackers taking advantage of IoT and cloud server vulnerabilities. stopped at the edge of the network, before serious damage can With well over 1 million devices already infected, REAPER can occur. Operators need to look at combining new, software-based unleash a fury that dwarfs anything before it.â&#x20AC;?

And while REAPER has the potential to push attack traffic into the multi-terabit level, itâ&#x20AC;&#x2122;s not just scale thatâ&#x20AC;&#x2122;s a problem.

Todayâ&#x20AC;&#x2122;s DDoS bots are based around sophisticated opensource software that is readily adapted to different attack types.

Many of these constantly changing attack types are woven together into a single attack that can punch large holes through traditional DDoS defence architectures.

Serious money Kourlas notes that webscale companies and their Internet service provider partners are often first in line to blame in the wake of a serious DDoS incident. Many have been throwing serious money at the problem.

Theyâ&#x20AC;&#x2122;re investing in ever more DoS mitigation appliances that sit deep within a network, and in detection appliances that decide which traffic flows are sent to these â&#x20AC;&#x2DC;scrubbing centresâ&#x20AC;&#x2122; for further analysis and cleansing. Detection appliances work by taking a baseline measure for what is considered â&#x20AC;&#x2DC;normalâ&#x20AC;&#x2122; movement of data, and by redirecting any traffic that displays suspicious spikes in volume. â&#x20AC;&#x153;This way of doing things is slow, expensive and subject to false positives and negatives,â&#x20AC;? warns Kourlas. â&#x20AC;&#x153;Used alone, traditional IP-flow based analysis is increasingly limited as a detection tool.â&#x20AC;?

capacity

december/january 2018

SPONSORED STATEMENT

approaches to DDoS analytics with the enhanced filtering abilities of modern routers to develop more accurate and scalable defence against DDoS attacks.

“The DDoS detection function belongs in software where it gains infinite context and scale,” says Kourlas. “You must be able to combine IP flow data, DNS data, BGP data, server data, packet ratios with view of how all public cloud services travel through the internet to reach your network. With all this context, you can instantly identify friend from foe far more accurately than before, and you can use this knowledge to dynamically stop volumetric attacks with the routers at the edge of your security perimeter.”

THE CHANGING FACE OF DDOS ATTACKS The most common and the most threatening form of modern DDoS attack is the so-called volumetric attack, accounting for around 90% of DDoS problems. These attacks have evolved to embrace cloud and IoT technologies. They use botnets to infect hundreds of thousands of these devices, which can quickly flood Internet and webscale network infrastructure with a huge amount of what at first seems like legitimate traffic. Network and cloud services become agonizingly slow, or stop altogether. These attacks can be huge, not of the order of a few Gbit/sec, but often several

hundred Gbit/sec, and sometimes 1Tbit/s and beyond.

Multi-vector attacks are increasingly common, where one attack type is used to tie up an organization’s security team while a secondary, more conspicuous attack causes the real damage.

Networks also face application layer attacks that exploit vulnerabilities in key networking protocols to attack application or cloud services.

While they can significantly reduce access to these services, they are targeted attacks at the protocol level and hence use far less bandwidth that volumetric attacks.

Taking defence further Modern routers purpose built to support DDoS defence take this one step further. They support millions of ACLs without impact to performance so they can keep up with massive DDoS armies composed of millions of things. They also provide packet filtering capabilities, again with massive scale, to complement DDoS analytics software – they look within packets for the telltale signature of volumetric attacks so they can report up or take action as necessary.

With this blend of multi-dimensional analytics and modern routers, Kourlas says, the operator can stop the 90% of attack traffic that constitutes volumetric attacks - without a trip to the scrubbing center. “This approach allows for the intelligent Capacity detection of volumetric attack traffic—down to the IoT device or centers and mitigation appliances for what they do best – cloud server—enabling real-time, surgical mitigation of even the stateful analysis that can detect and mitigate more sophisticated largest and most complex DDoS attacks. It also frees scrubbing application level DDoS attacks that constitute the remaining 5%-10% of attack traffic. This significantly lowers backhaul costs and scrubbing fees, which are typically tied to traffic volume.”

Deal with anxiety At the time of publishing, the REAPER threat has remained just that. Its discovery at such an advanced state of cloud/IoT infection has turned heads, and it’s started the debate on how to best deal with REAPER anxiety and the changed face of DDoS. The answer seems to lie in leveraging the right blend of multi-dimensional analytics and modern routers to handle these massive volumetric attacks, and refocusing traditional scrubbing centers on state-full, application level attacks.

Rethink DDoS protection: Insightdriven IP networking is here nokia.ly/insight-driven-automation

capacitymedia.com

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62 | appointments

Louisa Gregory Colt Colt Technology Services has named Louisa Gregory, corporate director for Asia, as chief of staff for the entire company, reporting directly to its CEO, Carl Grivner.

Gregory joined Colt in June 2016, based in its Singapore office, where she was responsible for HR operations in Asia as well as operations in Singapore.

Her new role will see Gregory ensure the company delivers in key areas of its growth strategy, which includes investing in an intelligent network suitable for supporting enterprise customers.

Grivner said: “We are delighted to have Louisa as part of the executive leadership team. Her strategic vision, international experience and knowledge in employee engagement will further support Colt’s network expansion and growth strategy globally.”

Annette Murphy Zayo Zayo Group has named Annette Murphy as its managing director of Europe. Murphy, who is based in Zayo’s London office, oversees Zayo’s European business operations. She will report to Jack Waters, Zayo’s CTO and president of fibre solutions.

As managing director of Europe, Murphy continues to lead all aspects of Zayo’s fibre solutions segment in Europe. She also oversees relationships with all European stakeholders, including employees, customers and partners.

Prior to her expanded role, Murphy served as the senior vice president of fibre solutions at Zayo. Before leading the fibre solutions team, she was the commercial director for Zayo in Northern Europe, where she managed the full product suite including connectivity, colocation and cloud infrastructure.

Christopher Pepper Atlantic Teleconnection Operating Co

Don MacNeil FiberLight Don MacNeil has been promoted from chief operating officer (COO) to chief executive officer (CEO) of FiberLight. MacNeil will take responsibility for FiberLight’s day-to-day operations and will also be focussed on maintaining FiberLight’s culture and values.

MacNeil joined the company as COO in September 2017, having been at EdgeConneX as CTO for just over two years; and prior to that he spent 14 years with XO Communications, most recently as COO. “Don’s experience and accomplishments make him the right leader for the next stage of FiberLight’s growth, and the timing couldn’t be better to position FiberLight as the go-to partner for enterprise and wholesale digital transformation initiatives,” said Jim Lynch, FiberLight’s chairman.

The Atlantic Teleconnection Operating Company (ATOC) has appointed Christopher Pepper as its new president. Before taking on this new role, Pepper acted as executive director of content and capacity planning at ATN International, the parent company of ATOC. Prior to this, he also held positions at C&W Networks, Columbus Networks, DirecPath and Amzak International.

Commenting on his appointment, Pepper said: “I am enthusiastic about future opportunities and looking forward to strategically leveraging ATOC’s subsea investments to improve broadband availability inside and outside of ATN telecom subsidiaries.”

In addition, ATOC also serves as a central capacity procurement and administration resource for ATN’s operating subsidiaries.

Capacity

Andrew Yeong Tata Communications Tata Communications has named former Oracle and IBM executive Andrew Yeong as the new head of sales for its Asia regional division.

Yeong brings over 20 years of experience of working in the blue-chip technology industry, with his most recent stint as GM for Asia Pacific at Lexmark. He has also held senior positions at IBM, Oracle and Atos.

In his new role, Yeong will be tasked with driving Tata Communication’s growth in the region across all industry verticals, focusing on providing transformation services to large corporations in the region.

Speaking on his appointment, Yeong said: “I am excited to join Tata Communications and play an integral role in the team that continues to lead from the front in breaking new ground with its innovative approach.”

Glenn Lurie

Toby Robinson

Alexander Matuschka Greiffenclau

Synchronoss

Avanti

Digicel

Glenn Lurie, the executive who brought the iPhone to AT&T, has become CEO of cloud and messaging company Synchronoss.

Lurie left AT&T, where he was CEO of AT&T Mobility, in September 2017 and has replaced founder Stephen Waldis as CEO, though Waldis remains as board chairman. He led AT&T’s pioneering deal with Apple for the launch of the first iPhone in September 2007.

“Glenn’s knowledge of the wireless and media space, broad industry relationships and operational acumen are second to none, and make him the ideal leader to drive the next chapter of success for Synchronoss,” said Waldis.

Toby Robinson, formerly of Eaton Towers, has been named as the chief commercial officer of Avanti.

Robinson was at Eaton Towers eight and a half years, first as commercial director and then as group chief commercial officer.

He was a member of the start-up management team at Eaton Towers, which has grown to 5,000 towers across Africa.

“This is a new – and vitally important – role at Avanti and we are delighted to have someone of Toby’s experience and track record joining us at this moment in our development,” said Alan Harper, CEO of Avanti, which also announced in September 2017 that Nigel Fox has re-joined the Avanti board as CFO.

Alexander Matuschka Greiffenclau, Veon’s group chief performance officer, will be group CEO of Digicel, across the Caribbean and in the Pacific, from February 2018. He replaces Colm Delves, who has stepped down after 13 years but will remain as a non-executive director and will continue to advise.

Denis O’Brien, chairman and owner of the Digicel group, said: “I am very pleased to welcome Alex to lead our talented management team at a really exciting time for the business.

Given his telecommunications credentials and his experience of working in dynamic and transforming sectors, he’s a natural fit for our business.”

Tell us your move

Capacity is keen to hear from readers about new roles and appointments in the industry.

Send details to james.pearce@capacitymedia.com, with a high-resolution picture

december/january 2018

Capacity

64 |

ACT LOCAL

Moving data to the fjords

T

he IT sector consumes 7% of global electricity already, and the number is climbing. That’s one reason that the calculation behind where companies decide to put their new data centres, or where they decide to colocate, has introduced an extra factor: where’s the power?

Cheap power has historically been made from fossil fuels. IT has been one reason that Virginia has been a destination in the US, because electricity is cheap and plentiful there.

But that might be changing for some companies. Not because the availability of power has changed, but because where it comes from.

Virginia’s power is cheap, for example, because 94% of it comes from coal supplied by local mines.

The low prices of oil and gas in recent years have also delayed the transition to renewables from generating companies. Recognising that utilities and governments will need a push to focus more on renewable sources of power, Greenpeace is campaigning to convince the people who decide where to put data centres to demand 100% renewable power sources.

It’s a serious campaign, conducted mostly away from the public view, and it has been successful.

The first movers have been the internet giants such as Facebook, Apple, and Google which made 100% renewable commitments five years ago.

They were followed by 20 internet companies – for example, AWS in 2014, and Equinix in 2015, including several

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global cloud and colocation companies.

The campaigner is keeping up the pressure, focusing now on regions, not just the US giants. When large companies make commitments, they can expect lobbying from Greenpeace wherever they are in the world.

Greenpeace is also emphasising that data, with regulatory and connectivity constraints, clearly, is mobile, so the owners of data should be putting it close to renewable power sources.

This is one of the reasons that the frozen north is attracting ever larger chunks of the global data centre business. Nordic countries’ governments have recently cottoned on to the potential, creating tax breaks for data centre operators.

But they have long been sitting on huge upside. Connectivity to Europe is good. Political and geological problems are small. There is no shortage of qualified technical staff. But the campaign to invest only in renewablepowered infrastructure is also pushing companies toCapacity invest in the Nordic countries.

For example, Facebook’s new Luleå data centre in Sweden, its prized first investment outside the US, covers 27,000 square metres, and is entirely powered by hydroelectricity.

It circulates air from windows in the facility’s upper level to make cooling more efficient.

This is normal in the Nordics: Byrne Murphy, the chairman of colo data centre builder Digiplex, points out that in the facilities his company operates,

Tim Phillips

circulating clean fresh air saves 20% of the power bill. There’s no premium for demanding renewable power sources, because almost all power in most Nordic regions is renewable anyway.

Norway, for example, uses 98% hydro, and data centres commonly use their own generators.

Nordic data centre operators are gambling that large US companies that want to locate data outside North America are going to be swayed by a sustainability commitment to choose them. As Greenpeace points out, 60% of the Fortune 100 and 43% of the Fortune 500 in the US have a greenhouse gas reduction goal, a renewable energy target, or both. Customer pressure so far hasn’t forced many providers to act more sustainably, it admits, not least because some are reluctant to report their true performance on power.

But there is evidence this is beginning to happen. Akamai reports and aggregates its energy performance data.

If prospective or current customers ask for it as part of their climate commitment, it will make it available.

As the amount of data travelling on the internet triples by 2025, and the regulatory incentives for sustainability increase, then the architecture of the building in which that data resides is bound to come into focus.

When it does, the fjords, bracing clean air and geothermal springs in Nordic regions aren’t just good for tourism. It may mean that much of Europe’s data migrates north too.

Market watch / January 2018 The deadline for written comments on the South African single wholesale open-fibre network comes to an end on 31 January 2018.

Shares in Liberty Latin America will start trading on 2 January 2018 on the Nasdaq exchange.

Beginning in January 2018, telecoms providers in Argentina will be able to offer customers pay-TV through cable and fibreto-the-home networks.

Interested parties can apply between 8 and 12 January 2018

to Thailand’s National Broadcasting and Telecommunications Commission for the position of secretary-general.

Ofcom’s new dark fibre consultation on BT in the UK is due to close on 29 December, with further information likely to be released in early 2018.

John Hickenlooper, governor of Colorado, is expected to decide by 28 December whether to go with AT&T or pick Rivada to build its emergency services networks.

IX Reach, formed out of the broken up Console Connect, is to be relaunched in January 2018.

PCCW Global took over part of the Console Connect business.

The deadline for bids to the Malaysian Communications and Multimedia Commission for spectrum in the 700MHz range closes on 2 January 2018.

Metro Connect, the premiere event for the US metro market, is taking place on 29-31 January 2018 in Miami, Florida. See www. capacityconferences.com/MetroConnect-USA to find out more.

december/january 2018

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