“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it beings to rain”. Mark Twain, US Novelist, 1836 – 1910
A Responsible Future By Alan Robinson
I read with interest Jean Devos’ “Letter to a Friend” in the last edition (March 2006) of SubTel Forum and, having been directly involved in both Gemini and Apollo, felt the need to reply and articulate a view that I have formed with my experience of these two systems. The need to “say something” was further inspired by John Manock’s “Recovery year behind us….” This article took an analytical view of 2005 and a crystal ball attempt to see through 2006. Jean is absolutely correct to look at Gemini as a prime example of a system developed at “the time of plenty”. The fundamental reason for introducing a privately financed cable to compete with the TAT’s, was to allow the newly de-regulated and licensed international carriers the commercial freedom to compete against the incumbent telco’s who formed the TAT consortia. Gemini had a simple shareholding structure, was underpinned by bank debt and had a small, capable management team. This allowed the venture to be planned, executed and operated in a very straightforward and effective manner, enabling quick decisions and sound profitability. The bank debt was repaid early, the company generated considerable amounts of cash and the business plan was exceeded in just about every aspect of its delivery. The sun truly shone, and Jean’s banker friends were busy replicating the model, firstly in the Atlantic and then around the world. Billions of dollars were
pumped into the supply side and the rest is history – the storm clouds gathered and the bankers ran for shelter, taking with them the valuable finance capability needed to build vital elements of global infrastructure. Bankruptcies, Chapter 11 filings, distressed asset sales all followed, and the industry is still trying to recover. The supply side was in meltdown, with companies having to slash costs to chase prices that were in free fall. During this turmoil, Apollo was built as a successor to Gemini, using a very similar formula and business model. Supplier finance replaced bank debt, and the joint venture included the system manufacturer, ASN as a minority shareholder. A similar management structure was developed and almost all operational tasks were outsourced. The objective is always to achieve the lowest operational costs, whilst maintaining the highest level of operating capability and standards. The differences in the operating characteristics of the 2 systems are relatively easy to understand even for the less technically minded. Gemini, after upgrades, had a maximum capability of approximately 6 x 10 g/bit wavelengths on a protected basis or approximately 12 x 10 g/bit wavelengths on an unprotected basis. Apollo was built without ring protection allowing customers to develop their own mesh networks. The fully lit capacity for the system is 640 unprotected 10 g/bit wavelengths, which over time, as more wavelengths are lit, guarantees our customers the most cost effective capacity across the Atlantic. In addition, Apollo differs from Gemini by offering a direct Europe (Paris) to Washington route which avoids New York. No other Atlantic system offers this route.
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