Israel's Bezeq (Tel Aviv: BEZQ.TA) is the latest incumbent service provider to enter the submarine cabling race with the launch of a new system linking Israel to Europe.
In conjunction with Alcatel-Lucent (NYSE: ALU), Bezeq's 2,297km submarine cable will link Tel Aviv to Italy and then into Europe via a terrestrial route.
What's driving Bezeq to build this new route is, not surprisingly, the growth of wireless and wireline broadband. At the end of 2010, Bezeq expects to have more than 5 million broadband customers.
Not only is Bezeq seeing an uptick in subscribers in its DSL subscriber base, but the service provider is continually upping the speeds of those services. In October, it debuted a 200 Mbps-capable VDSL2 service. And while Bezeq has not revealed the uptick for the service yet, users that are bandwidth hungry will find uses for these new pipes.
With broadband being the driver, Bezeq says the submarine cabling system will serve two functions: better services for customers and reducing the amount of capital it spends on leasing network capacity.
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