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Sun, 05 Jul 2009 | 07:21 GMT

Cable Breaks and IT Infrastructure

Oxford Business Group
 
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11 February 2008
When two underwater fibre optic cables broke just off the coast of Egypt on January 30th, internet and telecoms services to not only Egypt but across the wider Middle East and as far away as Pakistan, India and Bangladesh were severely affected. When two more cables suffered problems on February 1 off the coast of the United Arab Emirates, concerns about the adequacy of the region's IT infrastructure were thrown into sharp relief.

The cables that broke in Egyptian waters were the backbone of the Middle East-Europe communications corridor. Their damage reduced communications capacity between the Middle East and Europe by 75% according to Telegeography Research, a telecoms consultancy. Much European-bound traffic had to be re-routed all the way around the world, through South East Asia, across the Pacific and then Atlantic oceans.

The breaks initially disrupted about 70% of the Egypt's international network coverage and 30% of the service to its burgeoning call centre industry, according to its telecommunications ministrytelecommunications ministryLoading.... Meanwhile, up to 60% of India's westward international capacity was lost according to the Internet Service Providers' Association of India. The country's multibillion dollar internet-enabled outsourcing industry was quickly able to track down alternate routes to restore communications with its overseas clients.

Members of the financial services community across the region were unimpressed by the lack of redundancy in the Middle East's networks. Transactions slowed on both the Egyptian and Dubai stock exchanges. Banks around the region scrambled to re-route network connections. Egypt's central bankEgypt's central bankLoading... went so far as to say that the banking system would have to find alternatives if such disruptions were to happen again, although what they might be it did not say. When the cables off the UAE coast broke down, both the voice and internet services of UAE telecoms firm duduLoading... were badly affected, internet services in Dubai's Internet City were severely disrupted, and many South Asian expatriates in the Gulf complained of difficulties contacting relatives back home.

This quick succession of cable break-downs also hampered communications for small and medium-sized businesses, which account for nearly a quarter of the region's computing market. "We suffered most from email that didn't go through. Email is one of our main communication mediums." Mohamad Takriti, the chief executive of iHorizonsiHorizonsLoading... a Qatar-based IT service provider, told OBG. "We had major delays in email delivery... [and in] instant messaging among our branches."

Several telecoms operators downplayed the significance of the problems making little or no reference to them or how they were being addressed on their websites. Bloggers, never shy to make their feelings known, have been quick to register their displeasure, already very sensitive to what they perceive as high costs and poor service in many Gulf countries. One sharply refracted the IT companies' marketing jargon asking, "Where is the 'best in class' customer service?" IT analysts have long pointed out the relatively high international calling costs around much of the region due to the monopolisation of international gateways by fully or partially state-owned incumbent operators.

Other operators have been forthcoming with the costs associated with the breaks. The chief executive of BatelcoBatelcoLoading..., Bahrain's telecoms operator, said the company will have lost millions of dollars compensating customers for the disruptions. Egypt's telecommunications minister said users would be given a month's free service as compensation for their inconvenience. And, Saudi TelecomSaudi TelecomLoading... announced that it was forced to buy extra international network capacity.

Broken cables are generally quite frequent. In 2007, over 50 repair jobs had to be done in the Atlantic Ocean alone according to Global Marine Systems, a cable repair company. But since most regions with heavy traffic have adequate back-up systems and network redundancies, breaks rarely cause serious slowdowns. Though the Egyptian and UAE breaks are likely to be repaired within just a couple of weeks, the vulnerability of the regional network worries many.

"With countries like the UAE and Egypt pitching themselves as prime offshoring destinations, I expect to see a fair amount of damage control coming out," Margaret Adam, a senior IT services analyst with the market research firm IDCIDCLoading..., told OBG. Only days after the first bout broken cables on January 31st, Telecom Egypt and Alcatel-LucentAlcatel-LucentLoading... signed a deal for an underwater cable between Egypt and France. Then on February 5th, the Indian mobile operator Bharti Airtel announced it would in partnership with UAE and Saudi partners, among others, sink a cable linking India and France via the Middle East. Telegeography has said that several other new cables are also in the works.

While in the medium-term the new cables may relieve some vulnerability, the recent problems have underlined risks of doing business in the region that depends on time-sensitive electronic data. Businessmen have grumbled about this for some time. For example, bosses in Qatar cited inadequate infrastructure as the most problematic factor in doing business according to the World Economic Forum's Global Competitiveness Report 2006-2007. As Adam pointed out, the region has experienced such rapid, transformational growth over the last five to ten years it is inevitable that the infrastructure will be in a state of permanent catch up. It looks like businesses will grumble for a while yet.

© Oxford Business Group 2008

 
 
 
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