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The story of the Tyco Global Network (TGN) is perhaps one of the most fascinating instalments in the history of subsea cable systems. Built at an estimated cost of approximately $3.5 billion, VSNL International – which went onto become Tata Communications in 2008 – purchased the extensive TGN subsea cable network for just shy of $200 million. Tyco International had been a successful manufacturer and deployer of subsea cables systems – and indeed remains today so under the guise of TE SubCom – but its move into the capacity operations side of the telecoms market did not prove as fruitful. An industry still raw from the Enron scandal in 2001 watched closely to see who would take on the burden of such an extensive but expensive to maintain asset.
“They had built a Cadillac,” says Byron Clatterbuck, president of global carrier solutions, Tata Communications. “But did not have an operator-based understanding of the global bandwidth and communications services market when they built the network, and after only a few years of operations decided to exit. We believed we had enough experience and presence in the wholesale market to make it work.”
Some six years on and the move proved to be inspired. As Clatterbuck puts it, the network hit Tata Communications’ ‘sweet spot’ offering it subsea links across the Atlantic and Pacific as well as routes into Europe and the potential to extend links into Africa and the Middle East. In combination with the existing Tata Indicom Cable (TGN-TIC) which runs from Chennai in India through to Singapore, Tata Communications already had the foundations of a truly global cable system network. Conveniently the Tyco Global Network was also able to keep its acronym, simply becoming the Tata Global Network instead.
Avoiding congestion
Since then, Tata has effectively been filling in the gaps of the TGN network – extending routes into the Arabian Gulf and introducing its TGN-Intra Asia (TGN-IA) cable in 2009. This was the final piece of its Asia-Pacific puzzle, becoming the first system to link Singapore directly to Japan – with en-route branches into Hong Kong, Vietnam and the Philippines – and allowing Tata high speed access from India and Singapore to its TGN-Transpacific cable in Toyohashi, Japan.
As prominent cable routes, such as the one that runs between Singapore to Japan, become increasingly congested, carriers are also facing the challenges of differentiating their systems from the competition.
“There were already many systems on that route so we had to make sure we built something unique,” says Clatterbuck. “We decided to design the system to bypass Taiwan which is close to an earthquake zone and when one did indeed hit, our network was one of very few cables out of Hong Kong that was unaffected. We also introduced a direct fibre ‘shot’ linking Singapore and Japan which lowers latency and has proved to be incredibly popular with our customers.”
Making room for new capacity
As well as extending its global network, Tata Communications has also been keeping a close eye on how best to increase capacity on all its existing routes. The company is presently exploring opportunities to deploy 40G technology on its London-US route, and is similarly examining the future potential of 100G on all its key routes.
“A lot of the effort going on in the subsea industry right now revolves around finding new ways to increase capacity on existing fibre. Building new fibre is expensive and the industry move towards 40G and beyond will in part be driven by a shortage of fibre,” says Clatterbuck.
Upgrading technology on existing fibre, however, is hardly a simple task. Each cable system and fibre is different and requires an in-depth analysis before determining if an upgrade is viable on the route. “As the industry shifts from 10G to 40G technology, there are going to be issues. Sometimes only segments of a route can be upgraded and then you have to look at splitting it up and breaking it down. It’s not a cheap or trivial option.”
At the same time, Clatterbuck believes a more open market dynamic has evolved between carriers. “We are seeing a new wave of cable consortia,” he says. “The old incumbent carrier bilateral world where ‘you own that turf, I own this turf’ has gone. Most of us are trying to do
the same thing which is to enable city to city connectivity with no backhaul or access issues. There are very clear ownership parameters involved and it’s a positive change.”
Gateway to India
Although Tata has worked tirelessly on developing its global portfolio, its roots and core customer base are firmly Indian. The company’s operations derive from the international arm of the Indian incumbent VSNL.
The Indian government began liberalising the Indian telecoms market in the mid 90s, and by 2002 had sold most of its stake in the then-government owned VSNL to the Tata Group. Realising the fierce competition it would face in the domestic market, the then Tata-owned VSNL began focussing strongly on expanding its operations overseas. Its international headquarters were subsequently set up in Singapore by the company’s CEO Vinod Kumar in 2004, which is when Clatterbuck first joined the company.
“Most of our moves have been aimed at providing connectivity for the fast-growing Indian market towards the east and west,” says Clatterbuck. “We operate to provide for the massive connectivity requirements in and out of India, as well as within the Indian market itself. The country’s domestic and international requirements are only going to keep growing.”
In 2006, the company purchased the Canadian Tier 1 IP transit provider and international voice carrier Teleglobe. The move instantly gave the company a strong presence in the global internet transit business, and according to Clatterbuck, Tata Communications has since taken Teleglobe’s position in the Renesys service provider rankings from outside of the top 10 to seventh place.
In February of this year, the acquisition of the content delivery network BitGravity also indicated a fresh trajectory for the company. “We are focussing now on offering a wider variety of services for different market segments, as well as more managed services in areas such as security, hosting and cloud. It allows us to run a low cost network with lots of other services layered on top. You can’t for example, run cloud without a network and having sites to host it in,” says Clatterbuck.
Clatterbuck hopes this push towards diversifying the company’s services will address the balance between its wholesale and enterprise activities, which presently stands at approximately 81% service provider to 19% enterprise (including retail). Clatterbuck admits this makes Tata Communications quite unique in the modern carrier landscape, but is a result of its history and its relatively new entrance as a global provider for enterprise customers. “When we bought the Tyco network, carrier data was our biggest revenue generator, and our enterprise position was strong in India but in infancy on a global basis. When we acquired Teleglobe, we also acquired a huge voice market, which is again focussed largely on wholesale,” he says.
“We are entering a new phase of our development. Our aim was to first get the infrastructure, get the volumes up and get the business up to cover costs and improve that network. Now we are looking to address our balance between enterprise and service provider business, to focus on being much more about enterprise and an expansion of services offered to carrier customers.”
