Sprint to Join Venture in Transatlantic Cable

In a move to expand its presence in the emerging international telecommunications market, US Sprint Communications said Thursday that it will buy half of a new transatlantic cable and enter into a marketing alliance with the cable’s builder, Britain’s venerable Cable & Wireless.

The deal will extend Sprint’s all-optical-fiber network to Europe once the cable begins operation this summer. It will link the United States and Britain, with spurs running to Bermuda and Ireland. With fiber optics technology, data is sent as pulses of light through strands of hair-thin glass cable.

Under the agreement, which must be approved by the Federal Communications Commission, Sprint will buy out C&W;’s original partner, Washington-based Private Transatlantic Telecommunications System. Terms were not disclosed.

News of the transatlantic alliance came at a time of frenzied cable construction across both the Atlantic and the Pacific.

The C&W-Sprint; venture will be the second all-fiber transatlantic connection. In December, a consortium of American Telephone & Telegraph, British Telecom and France Telecom completed the first such link, which began service last month. A similar cable is being laid beneath the Pacific to Japan.

And another international venture, in which Cable & Wireless is also involved, is set to begin work next year on a second transpacific fiber-optic link, the North Pacific Cable. San Francisco-based Pacific Telesis is also participating in the project, which will link North America to Japan, South Korea, Hong Kong and Singapore.

According to telecommunications analysts, international calling volume is growing by more than 20% a year--about twice the growth rate of the domestic U.S. long-distance market. Fueling the increase is rapidly growing demand for high-speed transmission of computer data worldwide, which requires greater speed and higher quality than traditional copper wires can provide.

The Sprint-C&W; alliance extends beyond merely operating the cable through a joint venture to be called Global Fon, said Sprint spokesman Syd Courson. “This gives us a big leapfrog effect into the international market because we will do joint marketing of our products with Cable & Wireless throughout the United Kingdom.”

Sprint’s all-fiber U.S. network will carry telecommunications traffic from Europe generated by C&W;’s Mercury Communications subsidiary, and Mercury, which operates the only all-digital network in Europe, will distribute Sprint’s traffic.

William T. Esrey, president of Sprint, told a New York press conference that the new cable will enjoy a “substantial amount of business” from the very start as the partners shift existing customers--both business and residential--to it.

Esrey also said the deal would cause “very little” impact on Sprint’s balance sheet. The project will cost about $450 million overall, Esrey said.

The cable will provide 17,000 circuits capable of carrying 80,000 calls simultaneously, both voice and data. It will provide more capacity than all existing transatlantic cables combined.