Telefonica, Tyco to Build South America Undersea Fiber Optic Network

Tyco International Ltd. (Exerter, NH) and Telefonica Internacional (Madrid, Spain) will jointly develop a $900 million South America undersea fiber optic cable project called SAm-I. The system will connect South America, Central America, and the US and will combine with Telefonica's terrestrial network to provide complete connectivity for all the principal Latin American cities, with links in the Pacific and Atlantic Oceans.

According to the memorandum of understanding (MOU), the two companies will form a joint venture which will be owned 75% by Telefonica Internacional and its operating companies in Latin America and 25% by Tyco and managed by Telefonica Internacional. The supply contract for the system will have an approximate value of $900 million US dollars and has been awarded to Tyco Submarine Systems (TSSL). Additionally, significant technical upgrade enhancements are contemplated for the system and these upgrades will be provided and installed by TSSL.

The system is comprised of 23,000-km undersea cable system that will connect the US, Puerto Rico, Guatemala, Brazil, and Argentina on the East Coast and Chile, Peru, Colombia, and Guatemala along the West Coast of South America. The first phase will be operational in December of 2000, allowing Telefonica to offer complete connectivity for all the principal Latin American cities. The full system is scheduled to be operational by July 2001, with further improvement in its capacity.