The Emergence of Affordable Broadband Services for Remote Locations Using SFOC Technology Dr. William J. Barattino Mr. Nicholas Koopalethes

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2 The Emergence of Affordable Broadband Services for Remote Locations Using SFOC Technology Dr. William J. Barattino Mr. Nicholas Koopalethes Global Broadband Solutions, LLC 2 Cardinal Park Drive, Suite 202-B Leesburg, VA 20175

3 Presenter Profile Dr. Barattino has over 30 years experience in systems integration and program management for telecommunications, power systems, and advanced imaging systems. In 1997, he started Global Broadband Solutions, LLC ( GBS ) with colleagues Nick Koopalethes and Peter Sillitto, and serves as the company s Chief Executive Officer. Since its creation, GBS has a legacy of tackling challenging telecommunications projects that includes implementation of transoceanic submarine fiber optic cable systems, satellite communications on marine platforms, and extensive experience working with international carriers in provisioning global communications networks for clients. Place picture here Dr. William J. Barattino CEO/CTO wbarattino@gbs1.com +1 (703) office +1 (703) cell

4 Objective Present results of a case study of a remote user currently limited to SATCOM for off-island traffic, but requiring broadband services to accommodate future expansion plans. Two alternatives considered were: a. Continue existing reliance on Satellite Communications (SATCOM) services b. Installation of a regional Submarine Fiber Optic Cable (SFOC) system and connect into commercial fiber grid

5 Approach Establish User Requirements over Lifecycle of 25 Years No Growth Moderate Growth Define Pricing Assumptions Analyze Alternatives: Size and Price SATCOM Option Size and Price SFOC Option Compare Alternatives from Pricing and Scalability Perspectives Conclusions

6 User Requirements 25 Year Lifetime Two Off-Island Bandwidth Requirement Scenarios: No Growth: Maintain OC-3 over 25 Years Moderate Growth: Initial OC-3 with additional DS-3 every 5 Years Bandwidth (Mbps) Time (Yrs) No Growth

7 Assumptions for Case Study Current SATCOM earth station at remote site supports a single DS-3 No commercial SFOC system currently in operation in the country approximately 3000 km from commercial grid New SFOC system to have 25 year lifetime, with a 15 year period to recover initial capital investments Combination of debt and equity financing resulting in a cost of capital of 9% Additional services at the commercial teleport/cable station end will be the same for both delivery systems and not a discriminating factor for consideration

8 SATCOM System Sizing Satellite link budget calculated to determine the satellite transponder requirement for selected levels of transmission Fixed Earth Station: Std A Size Antenna (13m class) Remote Earth Station: Std B Size Antenna (9m class) Transmission Service Data Rate Modulation FEC Code Rate Satellite Allocation Link Availability (Mbps) (MHz) (%) DS QAM 7/ OC No solution as link can't be closed over 36 MHz C band or 72

9 SATCOM System Costs Price the SATCOM service using current commercial rates for an initial 15 year lease period, with follow-on pricing discounted at 3% per year for years 16 through 25 No Growth: Timeframe Bandwidth No. DS-3s Req'd Ave Cost/mo Ave Cost/yr Total Payments (years) (Mbps) (US $) (US $) (US $) 1 to $485,166 $5,821,996 $145,549,891 Total $485,166 $5,821,996 $145,549,891 Moderate Growth: Timeframe Bandwidth No. DS-3s Req'd Ave Cost/mo Ave Cost/yr Total Payments (years) (Mbps) (US $) (US $) (US $) 1 to $519,001 $6,228,015 $31,140,073 6 to $689,561 $8,274,735 $41,373, to $860,121 $10,321,455 $51,607, to $979,110 $11,749,319 $58,746, to ,068,888 $12,826,655 $64,133,275 Total $823,336 $9,880,036 $247,000,889

10 SFOC System Sizing Size a new SFOC regional cable system (~3000 km) including wet and dry plant Initial capacity to provide two 10 Gbps wavelengths of transmission (1+1 protection) In-cable restoration acceptable with SATCOM backup during a cable repair Transmission Service OC-192 Data Rate No. of Fiber Pair Initial Configuration Scalability Link Availability (Mbps) (MHz) (%) 10,000 comprised of multiple OC-12s and OC-3s 2 2λ (1+1) 64λ

11 SFOC System Costs Customer IRU using investor funding for capital costs of SFOC system; customer makes level yearly payments over 15 year capitalization period After completing payment of capital costs, IRU payments drop to 5% of yearly payment during capitalization phase Cable repairs covered with annual repair allocation of $2M Period Cost/mo Cost/yr Total Payments System IRU Yrs 1 to 15, capital $456,420 $5,477,040 $82,155,600 Yrs 1 to 25, O&M* $203,701 $2,444,412 $61,110,300 Total $660,121 $7,921,452 $143,265,900 * Payment includes annual repair ship allocation, 5%/yr for service of IRU & 1 mo/yr of DS-3 SATCOM Service

12 Comparison of SATCOM and SFOC Yearly Payments Monthly Recurring Cost ($) 1,200,000 1,000, , , , ,000 0 SFOC 2λ (1+1) SATCOM No Growth OC-3 SATCOM No Growth DS Year

13 Findings Transmission Service Max Bandwidth Ratio of Transfer Rates Total Payments 25 Yrs Unit Cost Scalability (Mbps) (US$) (US$/Mbps) SATCOM Moderate Growth Seven DS-3s $247,000, ,316 Limited SATCOM No Growth Three DS-3s $145,549, ,032 Limited SFOC OC , $143,265,900 14,327 Unlimited Scalability: SFOC is the optimum choice Life Cycle Costs: No Growth OC-3 Requirement: Represents breakeven transmission level between SFOC and SATCOM Moderate Growth Requirement: Regional SFOC system, with the existing SATCOM service used for restoration, is the compelling cost effective solution. Latency: Significant advantage for SFOC

14 Conclusion In meeting future broadband requirements of remote users, a regional SFOC system competed quite favorably with a SATCOM service starting at OC-3 bandwidth from a lifecycle cost basis and the clear choice from a scalability perspective. An initial hybrid system comprised of a regional SFOC system for primary transport with SATCOM backup for restoration was the recommended approach.