Telecom Italia Builds Mediterranean Fiber Network

ROME (05/23/2000) - Telecom Italia SpA, the Italian incumbent carrier, and four Israeli partners signed a definitive agreement last week to create a new company with the purpose of building and operating a Mediterranean fiber-optic network, Telecom Italia announced.

The Dublin-registered company Mediterranean Nautilus Ltd. will build a 7,000-kilometer submarine network linking Italy, Israel, Greece, Turkey, Cyprus and Egypt, Telecom Italia said. The network, construction of which will begin next year, will have a capacity of 3.84T bps (bits per second), enabling it to carry 3 trillion bits of Internet traffic per second, 45 million simultaneous telephone conversations or 300 hours of digital video per second, the company said in a written statement.

Telecom Italia will have a 51 percent stake in the new company and will be responsible for its operational management, the company said. The remaining 49 percent of the company will be controlled by Telecom Italia's Israeli partners, with 9 percent going to Aurec, 15 percent to Clalcom, 15 percent to Globescom, and 10 percent to Kama, the company said. Globescom and Aurec are already partners of Telecom Italia in Golden Lines, Israel's third telecommunications carrier.

Telecom Italia does not anticipate encountering political problems because of the strong Israeli presence in the project and the fact that the network will serve two predominantly Moslem countries, Egypt and Turkey.

"I don't think there will be any problem of that sort," a Telecom Italia spokeswoman said. "The agreement is technology based, and we have control of the company. The project will bring benefits to all the countries it touches."

There are no plans to admit other partners to the company in the immediate future, but some could be added in the long term, the Telecom Italia spokeswoman said in a telephone interview.

"We expect a huge growth in Internet use in these countries, particularly Turkey and Egypt," she said.

The network project, which was first announced on Jan. 30, will deliver international connectivity for "city to city" Internet services, high-speed voice, data and image transmission and hosting services, the Telecom Italia statement said. Mediterranean Nautilus plans to invest about US$500 million in the network over the next seven years, the bulk of the expenditure coming in the first three, the spokeswoman said.

Telecom Italia can be contacted in Rome at +3906-3688-2066 or on the World Wide Web at http://www.telecomitalia.it/.

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