Madrid, July 1st, 2015

Telebras S.A. and IslaLink S.L signed yesterday a shareholder agreement to create the joint venture that will be dedicated to launch and operate a submarine cable that will link directly the South American and European continents.

This joint venture is a Brazilian company which will be 35% owned by Telebras, 45% owned by IslaLink and 20% owned by a third Brazilian shareholder, which will be defined after the constitution of the company and before the construction of the cable.

The Project

International traffic demand in the region is growing at annual rates of over 40%, being the traffic to United States several orders of magnitude higher than that which goes straight to Europe. This is because today there is only a single cable connecting directly the two continents, which is already running out of capacity. The new cable will support the need for a high-capacity, direct connection between Europe and South America.

The cable will provide more than 30 Tbps (terabits per second) of capacity and require an investment of US$ 185 million to interconnect Brazil to Europe. Intermediate landings in French Guiana, Cape Verde, Canary Islands and Madeira are also being considered.

This project will enable Brazil and other Latin American countries to have direct access to the largest Internet Exchange Points (IXP’s) in the world, located in the cities of Frankfurt, Amsterdam, London and Paris, expanding the offer of international traffic capacity with lower latency and lower costs, thus enhancing performance and conditions for the general public and businesses, and particularly for those sectors with critical demands of latency such as health, cloud services and financial markets.

The submarine cable will also enable more than 1,400 institutions of research and education in South America (800 of them in Brazil) and 3,000 in Europe, including schools, universities, university hospitals, among others, to expand the exchange of information relevant to development of science and technology in their respective countries. This will intensify the exchange of data and images between research institutions in areas of astrophysics, cosmology, optical astronomy, among other high-demand bandwidth and low latency applications, given the recent adhesion of Brazil to the European Southern Observatory and the observatories in Chile.

The initiative has the support of the Governments of Brazil and the European Union, to promote greater integration and unity in the cultural, social, scientific, economic and political affairs of their people, giving priority to political dialogue, social policies, education, infrastructure, among others, and to eliminate socioeconomic inequality, achieve social inclusion and reduce asymmetries within the framework of strengthening the geostrategic area.

Brazil, through Telebras and the Unasul initiatives, is driving the creation of a large optical ring interconnecting the countries of South America that will enable the exchange of data across the region.

About Telebras

Telecomunicações Brasileiras S. A. – TELEBRAS is a public and private joint stock company, which provides strategic telecommunications solutions to the Public Administration and market, acting as an agent for local development and fomenting democratic access to information. It offers dedicated access to the internet for telecommunications service providers that have an authorization issued by Anatel. It also provides the necessary infrastructure needed by private telecommunications service providers, States, the Federal District, Municipalities, and nonprofit organizations.

Revived in 2010, Telebras had an optical fiber network of just over 400 kilometers, connecting the Federal District to Goiás and part of the Tocantins. From 2011 to 2014, Telebras has extended its terrestrial network by over 21,000 kilometers, reaching almost all Brazilian states. The revival of Telebras was strategic: as operator, reaches the most remote locations, reducing the cost of connection, besides promoting technological innovation with the creation of a modern network with the latest technology.

About IslaLink

Founded in 1999, IslaLink is an independent and neutral operator specialized in the submarine telecommunications sector with headquarters in Madrid, Spain, whose mission is to deploy and operate submarine cables on under-served routes, to provide its customers with the top quality managed bandwidth services they require for their retail operations.         

So far IslaLink has deployed systems representing investments of more than EUR 125 million and 4,000km of optical fiber with a total of 10 landing stations and approximately 1,500km of terrestrial networks. IslaLink is currently planning additional investments encompassing more than 10,000km of optical fiber.

Since 2014, IslaLink is majority owned by EQT (www.eqt.se), which was founded in 1994 by Investor AB, the Nordic region’s largest industrial holding company and part of the Wallenberg family group of companies. EQT is today the leading private equity group in the Nordic Region, having raised a total of EUR 22 billion of capital commitments since inception, of which EUR 2.9 billion are focused on acquiring and developing operational infrastructure businesses.

Contacts: 

Grupo Albión

Alejandra Moore / Maribel Alonso

Tel: +34 91 531 23 88