Alcatel Consolidates Position in Submarine System Supply But Competitors Promise a Fight For Limited New Business; Bandwidth Demand Still Growing 40% per year. Capacity Deficits Forecast in Some Regions.

BOSTON -- Pioneer Consulting's new report, Suppliers of the World's Submarine Fiber-optic Telecommunications Systems: The New World Order, concludes that Alcatel has maintained a lead in the submarine fiber optic market overall and NSW (Corning) has established a strong position in the repeaterless segment. Nevertheless, despite ongoing market consolidation, there is still significant competition from remaining players and from new entrants leveraging new technologies. The report comprehensively profiles all 19 suppliers currently active in the market.

The proliferation of initiatives around the world to deliver new "bandwidth-hungry" broadband services is driving demand for submarine capacity. Already, undersea system investment in 2005 is close to $1.5B up from $380M in 2004. The report finds that intra-regional demand is steadily eroding the overcapacity which has dogged this market. Even some transoceanic routes will require new systems within the forecast period 2005-2013.

Julian Rawle, Senior Market Analyst at Pioneer Consulting, said, "The report focuses on how system suppliers are dealing with the new challenges and opportunities of a "post-apocalyptic" market." Rawle continued, "We concluded that the key factors for success are a strong pedigree, an integrated manufacturing capability, global coverage, and a product range which addresses operators' concerns about cost-efficiency and connectivity, rather than simply building bigger pipes."

Planned Submarine Fiber Optic Cable System
                  Supply Contracts Yet To Be Awarded

                                                        Route
                                                       Length     Cost
Cable Name                     Owners           RFS      (km)     ($M)
============================== =======================================
Carus                          VTI            3Q 2005   1,200     150
------------------------------ ---------------------------------------
New Caledonia-Australia        OPT (New
                                Caledonia)   June 2006  2,000      70
------------------------------ ---------------------------------------
Pakistan-UAE-2                 PTCL &
                                Etisalat        TBA     1,610    55(a)
------------------------------ ---------------------------------------
Cadiz-Tenerife                 Consortium       TBA     1,395    48(a)
------------------------------ ---------------------------------------
Canaries                       Auna             TBA     1,600(a) 50(a)
------------------------------ ---------------------------------------
TCCN                           Consortium       TBA         -       -
------------------------------ ---------------------------------------
Repeatered TBA Total                                              373
============================== =======================================
Bharat-Lanka                   BSNL           Oct 2005    300      18
------------------------------ -------------- ------------------------
Fibralink (Jamaica-US)         Caribbean
                                Crossings     Oct 2005  3,000     300
------------------------------ -------------- ------------------------
Kodiak Link                    Kodiak Kenai
                                Fiber Link    Dec 2005    540      43
------------------------------ -------------- ------------------------
Mallorca-Menorca-2             Telefonica       TBA       105     9(a)
------------------------------ -------------- ------------------------
Pontianak-Jakarta-Batam        PT Telkom        TBA     1,872     100
------------------------------ -------------- ------------------------
Vietnam North-South Festoon    VNPT             TBA     2,000     168
------------------------------ -------------- ------------------------
Unrepeatered TBA Total                                            637
------------------------------ -------------- ------------------------
Source: Pioneer Consulting Submarine Cable Database

(a) Pioneer estimate

New market dynamics are also encouraging other companies. Azea Networks, Red Sky Systems, and Xtera are seeking niche opportunities in the market using developments in submarine fiber optic technology to reduce both capital and operating costs.

Howard Kidorf, President of Kidorf Innovative Methods, who collaborated with Pioneer on this report, remarked, "Because of increasing demand for intra-regional systems, the line of demarcation between terrestrial and submarine fiber optic systems is a major focus for R&D at the moment. Companies are finding ways of blurring this line by extending repeaterless spans and cost of terminal equipment."

Further information

For more information on this report, including an abridged version of the executive summary, just click on the following link: Suppliers of the World's Submarine Fiber-optic Telecommunications Systems: The New World Order or contact Pioneer at: [phone].

About Pioneer Consulting, LLC

Pioneer Consulting is an influential international market research and analysis firm specializing in worldwide broadband telecommunications networks and technologies. Since its inception in 1997, Pioneer has rapidly become a trusted leader in providing high quality, objective analytical telecom research to many of the world's major network equipment vendors, carriers, service providers, and financial institutions. For more information on Pioneer Consulting and its products and services visit the company's Web site www.pioneerconsulting.com