High expectations for Brazil undersea cable to Europe

The Brazilian government expects that its future undersea fiber optic telecommunication link with Europe will result in a reduction in Internet costs to final consumers as well as increased security.

A Brazil-Europe submarine cable will be built under a joint venture led by Brazil's state-owned telecom provider Telebras and Spain's IslaLink Submarine Cables at a cost of $185 million and will begin in July.

"This new submarine cable provides a direct connection to the European continent, decreasing latency. It is expected that this will result in cost reductions," the coordinator of the submarine cabling project at Telebras, Ronald Valladão, told Deutsche Welle Brazil, adding that the savings to consumers could reach as much as 15 percent.

There is currently one cable connecting Brazil to Europe, Atlantis II, which is old and has limited capacity, being almost exclusively used as a telephony link.  The country has four other submarine cables, each connecting Brazil to the United States.

The new cable will link Portugal to the city of Fortaleza in the northeast of Brazil. The project was announced following reports that the National Security Agency in the United States had been spying on Brazil's telecommunications - the plan is to build links that would funnel internet traffic between South America and Europe, bypassing the US entirely.

Telebras maintains that the motivation for building the undersea link is economic - with the added bonus of security - but stresses that the cable project would have gone ahead regardless of the revelations regarding the NSA spying revelations.

Change in priorities

The state-owned telecoms firm had also announced a partnership with Angola to build another submarine fiber optic cable link between the two countries. The idea was that Brazil would serve as a relay point for a link that Angola Cable is building to reach the US via Brazil.

But Telebras released a note last week where it "clarifies" the point that "the company's priority is the construction of the submarine cable linking Brazil to the European continent." The note added that the Brazilian government offered Angola Cables a landing point on Brazilian soil, also in the northeastern city of Fortaleza - meaning the Angolans would no longer have the Brazilian government as a financial partner for the project.

The original deal looked a little bit different. Back in March 2012, an agreement was signed between Telebrás and Angola Cables that formalized the interest of both companies to work together to launch the fiber optic structure, which should have been ready in time for the World Cup. In fact, this would have been helpful given the concerns around the country's telecoms infrastructure ahead of the sporting events. 

At the time, Telebrás then president Caio Bonilha, who quit earlier this year, said an international tendering process would be launched by June 2012 detailing the project. This never happened, sparking controversy between Telebrás executives and Angola Cables president António Nunes, who was quoted extensively as criticizing the Brazilian government for giving up on the project.

The initial Telebrás plan was to build five undersea cables to the US, Portugal, Uruguay, another Brazilian cable linking the north with key cities of São Paulo and Rio de Janeiro, as well as Angola. However, cash shortages meant that it was only possible to carry out a single project and the European link took priority.