Seaborn Networks ("Seaborn") and IOX Cable Ltd ("IOX") announced today they have entered into a joint provisioning agreement to provide the first next-generation subsea fiber optic route between the U.S and India that will interconnect in South Africa and Brazil.

This unique path connecting the U.S. with three BRICS countries and Mauritius will provide the most secure and reliable route between these markets by providing fewer hops through fewer countries than existing alternative routes.

Seabras, SABR, IOX Cable Map

Source: IOX

Seaborn is the developer-owner-operator of: Seabras-1, the most direct subsea system between New York - São Paulo; ARBR, the only new direct subsea system planned to be built between Brazil - Argentina (RFS Q4 2018); and SABR, a new subsea system between Cape Town, South Africa and Seabras-1 (RFS 2019).

IOX is the developer of the IOX Cable System ("IOX System"), the first next-generation subsea network interconnecting South Africa, Mauritius and India (RFS 2019). IOX have commenced work for the cable route survey, and once completed will provide a direct route between South Africa and India via Mauritius. Seaborn's SABR and the IOX System will interconnect in South Africa.

The Seabras-1 + SABR + IOX System route will be available exclusively through Seaborn and IOX. Customers can contract through either Seaborn or IOX to receive the full benefits of this alliance.
"We are extremely pleased to work with IOX to provide this unique and highly secure route," said Larry Schwartz, Chairman & CEO of Seaborn. "This alliance will reshape the global communications landscape for the Southern Hemisphere."

Arunachalam Kandasamy, founder and CEO of IOX, said "This new relationship between Seaborn and IOX pioneers new global route alternatives to interconnect key emerging markets with the U.S. This strategic relationship is a step forward for us to give our customers and partners the best routes and services and also contribute to the emerging digital economies.".

Source: Seaborn-IOX Joint Press Release

ANALYSIS: The idea of connecting the Americas to Asia via South Africa, instead of going via the Mediterranean and Egypt, has been around the market for at least the last five years but few gave the idea any credence. This initiative by Seaborn and IOX is bold and could succeed although there are a significant number of challenges.

It is not clear where start-up IOX is getting its funding from. Mauritius Telecom is an anchor tenant but it is doubtful that MT would be able to provide the funding for a 9,000km marine survey. Seaborn’s Seabras-1 cable was financed chiefly by pre-sales to content providers and a US$110 investment by Partners Group. It is possible that Larry Schwartz, CEO of Seaborn, whose strength lies in finance, has lined up the same kind of financing for SABR and IOX.

Interconnections may also be an unresolved issue. Seabras-1 passes Fortaleza, Brazil, the termination point for SABR, but it does not currently land there. Seabras lands in Sao Paulo, Brazil. However, Seabras has a stubbed BU (branching unit) facing Fortaleza. There would be a financial decision to be made whether to activate that BU or arrange backhaul between Sao Paulo and Fortaleza.

In South Africa, SABR is planned to land in Cape Town on the Atlantic coast of South Africa while IOX lands at East London on the Indian Ocean coast. A terrestrial link across South Africa would have to be sourced and could be quite expensive.

Finally, it is debatable whether India has been correctly identified as the market driver for this proposed system of systems. There is a strong argument that the bulk of US-Europe-Asia traffic is originating further East and hubbing in Singapore. This was clearly the rationale behind the original SAFE cable which connects South Africa to Penang, Malaysia with a branch to India. SAFE is fifteen years old and may no
longer be upgradeable. A replacement system will be required.

​It is also interesting to note that Brazil, South Africa, and India are members of the BRICS economic grouping. An initiative to build a global BRICS cable has died on the vine but the kind of commercial initiative by Seabras and IOX focused on a project with a realistic scale has been shown in the past to be able to succeed where grand plans have failed.