Gulf Port Cable Presentation 1


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Gulf Port Cable Presentation 1

  1. 1. Gulf Port Telecom our business is connection Presented by Eric Oaks
  2. 2. Concept <ul><li>Create a business to build a sub-sea cable linking the Gulf with the Mediterranean: Iraq – UAE – Djibouti – Suez - Palermo </li></ul><ul><li>Simple – Just five necessary branches/landings. A straight-forward approach by a nimble, fast-moving provider of a point-to-point connection. </li></ul><ul><li>Address needs with a new access path to high-demand East Africa; A primary access method to the under-served and high-demand market of Iraq </li></ul><ul><li>Address secondary access needs method for incumbents – redundancy, load balancing, diversity </li></ul><ul><li>Termination in region at Palermo or Mediterranean location – telecom neutral and a NATO country (important to DOD, DOS) </li></ul><ul><li>Exit Strategy: </li></ul><ul><li>Streamline design and get in ahead of other builds, maximize return on investment and sell business to anchor tenants and/or global telecom operators – create enough competition to get noticed and bought </li></ul>
  3. 3. MAP Iraq – UAE – Djibouti – Suez - Palermo
  4. 4. Potential Investors <ul><li>Iraq: Asiacell, Itisaluna, ZainIQ (Iraqna) </li></ul><ul><li>Dubai – Du </li></ul><ul><li>Egypt – Egypt Telecom </li></ul><ul><li>Djibouti – Djibouti Telecom </li></ul><ul><li>UK – C&W, BT </li></ul><ul><li>USA – AT&T, Verizon [USA drivers: Department of Defense, Department of State] </li></ul><ul><li>Venture or Risk Capital Funds </li></ul>
  5. 5. Market Situation <ul><li>It’s the high-tech spoils of war: The U.S. military plans to award telecommunications contracts worth as much as $24 billion, and the top-tier carriers are signing up to get a piece of the action. </li></ul><ul><li>The U.S. Department of Defense is working on six major telecom contracts, and four of them are expected to be awarded in 2008. – Network World </li></ul><ul><li>On February 6, 2007, President Bush and Defense Secretary Robert Gates announced the creation of U.S. Africa Command. The decision was the culmination of a 10-year thought process within the Department of Defense (DoD) acknowledging the emerging strategic importance of Africa, and recognizing that peace and stability on the continent impacts not only Africans, but the interests of the U.S. and international community as well. Yet, the department’s regional command structure did not account for Africa in a comprehensive way, with three different U.S. military headquarters maintaining relationships with African countries. The creation of U.S. Africa Command enables DoD to better focus its resources to support and enhance existing U.S. initiatives that help African nations, the African Union, and the regional economic communities succeed. </li></ul><ul><li>The command inherits a small but meaningful U.S. military presence already existing in several African nations, to include Camp Lemonier in Djibouti </li></ul><ul><li>Mary Carlin Yates, a senior U.S. diplomat, is Deputy to the Commander for Civil-Military Activities (DCMA) of United States Africa Command. Among U.S. geographic commands, AFRICOM is unique in having two co-equal deputies -- a civilian deputy and a military deputy. The DCMA's military counterpart is the Deputy to the Commander for Military Operations (DCMO). </li></ul><ul><li>As U.S. Africa Command's DCMA, Ambassador Yates directs the command's plans and programs associated with health, humanitarian assistance and de-mining action, disaster response, security sector reform, and Peace Support Operations. </li></ul>
  6. 6. Market Situation <ul><li>June 9th marked an important date in the history of Kenya’s leading Telecom company, Safaricom as it ventured into the Nairobi stock market. The introduction of Safaricom shares and soaring by as high as 60% on the first day of trading signals appetite for strong growth companies in the continent still booming Telecom sector. – IPO Market, June 10 th </li></ul><ul><li>Verizon will continue to invest in a growing global market: Verizon Business reported overall third-quarter 2007 revenues of $5.3 billion, a total revenue growth of 2.2 percent compared with the third quarter of 2006 on an adjusted basis (non-GAAP).*  This represents Verizon Business’ fourth consecutive quarter of year-over-year, pro-forma revenue growth. Global sales of strategic services such as IP, Ethernet and managed services continued to accelerate dramatically during the quarter, exceeding declines in revenue on a year-to-date basis from core services such as traditional voice and data.  </li></ul><ul><li>Verizon Business again moved during the quarter to enhance its already unrivaled suite of products and services as well as its position as a premier provider of end-to-end communications and information technology solutions. </li></ul>
  7. 7. Market Situation <ul><li>Only a handful of African countries have so far signed up to back a US$280 million telecommunications cable that is crucial to improve bandwidth in South Africa ahead of the 2010 soccer World Cup. But the South Africa government is adamant that the East Africa Submarine System (Eassy) fiber-optic undersea cable, intended to link South Africa with East Africa and the Middle East, will go ahead. – BNet, June 8 th , 2008 </li></ul><ul><li>AT&T Government Solutions: More than $35 billion invested in network infrastructure since 1998  </li></ul><ul><li>World's most sophisticated communications network  </li></ul><ul><li>32 state-of-the-art Internet Data Centers worldwide, with more than 1.8 million square feet of hosting space  </li></ul><ul><li>More than 15 petabytes of data transported per day through 2,500 points of presence in more than 850 cities across 60 countries </li></ul>
  8. 8. Market Situation <ul><li>NAIROBI, Kenya — Plans to lay an undersea fiber-optic cable off eastern Africa could be the beginning of the end of crackling long-distance calls, slow dial-up Internet connections and universities without e-mail. Four projects are in the works to link 22 eastern, central and southern African countries to the world's network of submarine cables and 21st century communications. They would enable cheaper international calls with no static and fast Internet access. The first cable could be finished as early as March. At the moment, the Indian Ocean's eastern African seabed is the only one in the world without a submarine fiber-optic cable, forcing the region to rely heavily on limited and expensive satellite links. As a result, countries along the coast and in its hinterland have some of the highest communications costs in the world. Even though fiber-optic links would drive down communication costs for businesses and consumers, it also could be a big opportunity for entrepreneurs. – USA Today, June 3 rd , 2008 </li></ul><ul><li>India's Tata Communications and Etisalat said they had signed a deal to provide network services in the UAE, a move that would boost Tata's expansion overseas. – Reuters, 27 th May, 2008 </li></ul><ul><li>Telecom Egypt (TE), the incumbent telecom operator in Egypt, and Alcatel-Lucent have signed a US$125 contract to deploy a new submarine cable network linking Sidi Kerir in Egypt to Marseille in France. Named TE North, the project will enable Telecom Egypt to expand international connectivity, providing diversity from existing cable routes. – IT Insight </li></ul><ul><li>Du, the second telecom firm of the UAE, has increased its mobile user base to 400,000, according to a newspaper. The company said that its mobile user base increased form 250,000 at the end of March to 400,000 at the end of May. Company CEO Osman Sultan said that the firm is on its way to achieving the target of owning 30 percent of the country's mobile market by 2009. </li></ul>
  9. 9. Competition in Region <ul><li>FOG </li></ul><ul><li>SMW-3 </li></ul><ul><li>SMW-4 </li></ul><ul><li>FALCON </li></ul><ul><li>FEA </li></ul><ul><li>Overland - Bandar Abbas and Bushehr options; Kuwait, Jordan </li></ul><ul><li>Satellite </li></ul>
  10. 10. Competitors’ Strengths <ul><li>Full Service Product Suites – IP transit, SDH, Wave Length, Collocation, VoIP </li></ul><ul><li>Longer reach, wider distribution – wouldn’t need to meet in region </li></ul><ul><li>First-to-market, proven distribution and delivery, brand recognition </li></ul><ul><li>Stable financial model, not dependent on one region </li></ul>
  11. 11. Competitors’ Weaknesses <ul><li>Consortium Cables operate inefficiently and with little regard to individual user needs </li></ul><ul><li>Current private cable operators are looking to dominate global market and enter national markets they serve with mobile and LD licenses = competition for the incumbent and new entrants </li></ul><ul><li>No effective diversity/protection options inherent to existing systems </li></ul><ul><li>Current entrants opt for complex, multi-nation “all-singing all dancing” solutions that are difficult to bring to market quickly and efficiently </li></ul>
  12. 12. Management Concept <ul><li>GPT would be an overlay management group coordinating the various outsourced functions – lean, low-overhead </li></ul><ul><li>NOC – Outsource to TATA or to the Fujairah NOC of Reliance </li></ul><ul><li>Construction – Outsource to Alcatel, Fujitsu, etc. </li></ul><ul><li>Maintenance – Outsource to E Marine, etc. </li></ul>
  13. 13. Construction and Operation Costs <ul><li>Build Costs </li></ul><ul><li>Operation Costs </li></ul><ul><li>Licenses </li></ul><ul><li>Engineering and Marine Costs </li></ul><ul><li>T&E </li></ul><ul><li>Legal and Incorporation Costs </li></ul>
  14. 14. Revenue Model <ul><li>IRU Payments </li></ul><ul><li>O&M Payments </li></ul><ul><li>Equity Partnership Option – Invest for Access </li></ul><ul><li>Long-Term Lease Options (3-year) </li></ul>
  15. 15. Hurdles <ul><li>Licenses, Landing Agreements </li></ul><ul><li>Egypt landing/crossing, Suez </li></ul><ul><li>Investment – High Initial Cost Basis </li></ul><ul><li>Seed Money </li></ul><ul><li>ROI </li></ul><ul><li>Continued operation over lifespan </li></ul><ul><li>Repair/Maintenance/Upgrade Costs </li></ul>
  16. 16. Potential Future Expansions <ul><li>Kenya </li></ul><ul><li>Pakistan </li></ul><ul><li>Somalia </li></ul><ul><li>Jordan </li></ul><ul><li>Turkey </li></ul><ul><li>Sudan </li></ul>
  17. 17. Thank you Gulf Port Telecom our business is connection