European bank loans Turk Telekom $50M for cable system

ANKARA (AA) - The European Bank for Reconstruction and Development (EBRD) has issued a $50 million loan to Turk Telekom Group, the bank announced in a statement on Tuesday.

The loan will be used for a new fiber-optic submarine communications cable system, capable of carrying data between 17 countries, from Singapore to France and Italy, the statement said.

"The financing will be used to lay cables under the sea and build a branching unit in Marmaris on the Mediterranean coast, in Mugla Province, southwestern Turkey. Branching units are used in submarine cable systems to provide traffic and power routing between the trunk and branch cables," the statement added.

Turk Telekom Group, Turkey’s largest telecommunications company, is building the new submarine cable system, which has a capacity of 24 terabits per second on three fiber pairs, in a consortium with 17 other telecommunications operators.

The $700 million network, dubbed the SEA-ME-WE 5 (short for South-East Asia-Middle East-Western Europe 5), will be approximately 20,000 kilometers (12427.4 miles) long and is expected to become operational in late 2016. The line will connect South-East Asia, the Indian subcontinent, the Middle East and Europe, the statement said.

"Once completed, its advanced 100 Gbps1 technology is expected to meet the rapid growth in demand for fast internet traffic between Europe and Asia," it said. "The system will also bolster Turkey’s internet infrastructure as the country’s growing economy needs greater connectivity and ever-stronger commercial ties with Europe, the United States of America and Asia."

Turkey has experienced a steep increase in internet use over the last couple of years thanks to investments by telecommunications operators and an enhanced competition in the market.

Demand in the country is also growing due to the popularity of video streaming, with high definition replacing lower picture qualities.

"The increased capacity for data traffic will result in higher quality for internet connections in Turkey and the neighboring countries," the bank said. "Investing in higher-quality internet connectivity is part of the EBRD’s efforts to foster innovation in the Turkish economy," it said.

"This mega internet infrastructure project will serve as a brand new platform for future telecommunications business," Jean-Patrick Marquet, EBRD director for Turkey, said.

"It can help build a strong digital industry in the country and attract high-tech companies, content providers and major players in the digital economy," he added.

Cem Velipasaoglu, chief financial officer at Turk Telekom International, said: “We are proud to receive the EBRD loan to finance Turkey's SEA-ME-WE 5 consortium membership.

"The EBRD is recognizing the enormous economic potential created for our customers by this essential international project."