Global Crossing Upgrades AC-1

At the Pacific Telecommunications Council (PTC), glbc announced today that they are upgrading their Atlantic Crossing 1 cable.  That’s the original cable from 1998, as opposed to the larger AC-1/Yellow which it shares with Level 3 Communications (NYSE:LVLT, news, filings).  Global Crossing is adding some 600Gbps to AC-1, which is a hefty pile that should be enough for a year or two or three.

Unlike XO’s puzzling undersea move yesterday, Global Crossing’s upgrade is a logical consequence of its growth and direction.  The company’s share in the IP market has been rising steadily, and transatlantic pricing has been robust enough to justify building rather than buying.  Their focus on the international corporate market makes it very desirable to keep control of that capacity if possible.  Last year they substantially upgraded their Mid-Atlantic Crossing (SAC), which connects North and South America,  perhaps next up is SAC?

For a long time Global Crossing didn’t invest much in its network, largely because it was fighting cash burn from hell but also because the transatlantic market was so bad that an upgrade was unjustifiable financially.  Even a few months ago I doubted whether they or Level 3 would upgrade their older transatlantic cables; that they would buy capacity instead from the four newest.  Since then, I have learned that Level 3 upgraded Yellow earlier in 2008, and now Global Crossing is upgrading AC-1, and they may have upgraded AC-2 also, I’m not sure.  I’m glad to be wrong, it implies greater health amongst carriers than I would have anticipated in the teeth of this recession.

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Categories: Internet Backbones · Undersea cables