We caught up with Cengiz Oztelcan, CEO of Gulf Bridge International (GBI), to discuss the changing sector of the Middle Eastern submarine cable industry, and how the company are facing these changes to create exciting future growth.
Could you tell us a little bit about Gulf Bridge International and its current position in the market?
GBI is one of the very few and unique privately owned submarine cable companies in our industry. We are headquartered out of Doha, Qatar, but we have a pretty wide coverage of the GCC [Gulf Cooperation Council] region, with extensions into Asia and Europe. So, we see ourselves as a connectivity player within the Gulf, but also as a bridge between East and West, from Asia to Europe.
What are the biggest challenges that you are seeing in the Middle Eastern sector at the moment, and how are you tacking those?
So, obviously the industry at large is seeing quite a challenging trend in the pricing of our products. If you look into the price evolutions, there are continuous price erosions and price declines, and on the flipside of the coin, a lot of competition is also being built up.
This is good in a sense, that the job we do keeps pushing us to do the best job that we can do for our customers, but particularly in the Middle East now, there is a lot of attention by the hyperscalers and by other content providers and gamers to get closer to their customers. As the Middle East region is still developing a robust regulatory framework for this, and the pricing regime, I think there is a tremendous mismatch in the expectations of these large global players and what they expect from the Middle East and the GCC region on terms of the availability of fibre, regulatory framework, and also most importantly, pricing. This mismatch causes a lot of challenges for us to ensure that we work hand in hand with the hyperscalers and large companies to come closer to the region, to set their operations in the GCC region closer to their customer base.
Secondly, from a technical perspective, it has always been a challenge of this industry that many of the submarine cable networks follow a very traditional route, from the Middle East to Europe, with pretty much most of them going through the Red Sea and the Egypt corridor, to reach Europe.
As these large customers are coming into the region, they are demanding alternative solutions. One of our challenges is to be able to really to come up with diverse, robust and reliable alternative solutions that we can offer our large customers, in addition to the traditional route that follows the Red Sea and the Egypt corridor.
So, there are a lot of projects in place at the moment, and a lot of large investments being poured into new networks. The challenge, is to make sure that these new routes are established, and they are stable, robust and they maintain the quality that our customers want.
Since hyperscalers like Google and Microsoft are having an increased presence in the Middle Eastern market, how is that changing the landscape that GBI operate in?
I think there is a pretty fundamental shift in access to those hyperscalers. Obviously, in previous years, many of our customers used networks such as GBI to reach to these hyperscalers in other locations – whether that be in Europe, the US or Asia. Right now, when these hyperscalers are looming in and coming into the region, obviously the need for most of our customers to connect to far away locations to reach those hyperscalers is being eliminated. They are basically reaching the same content, same applications, and same offerings locally, here in the region. So for one thing, the needs of our end customers are changing.
But on the other hand, obviously when the hyperscalers they setup their large data centres, points of presence, regional nodes, edge nodes here that gives us a new breed of opportunities in terms of our business. So, once they come into this region, they have different requirements, such as large data centres and connectivity to those data centres from other locations in the region.
All in all, the connectivity business stays, but the topology and the A end and the B end of the connectivity are changing, but I see this as a great development for the region. I think it’s very exciting for all of us to be hosting these large hyperscalers in and around the GCC region, and we are very keen and excited to be working with them.
What are GBI’s priorities for the near future and beyond, in terms of expansion or key strategic partnerships?
Essentially, our core business is connectivity. We would like to stay in this connectivity business – we are an international, long haul connectivity player. One of the things that we will do is to start building alternative routes, in addition to our traditional Egyptian route to Europe. We are going to be building a combination of submarine and terrestrial routes, that provide the much-needed redundancy and resiliency that our customer demand.
Secondly, one of the big challenges in the GCC region is the last mile pricing in in-country terrestrial fibre pricing. What we plan to do is acquire (at least at home in Qatar) the assets of terrestrial fibres, so that we make that a much more attractive proposition to our large customers. So, we will be moving outside of oceans and onto land, acquiring and building some terrestrial fibre networks in countries that we see as critical to be hosting these hyperscalers.
Thirdly, we would also like to move into the datacentre business. Again, it is one of the hardest business areas in our industry over the last couple of years, and the demand on datacentres will continue to grow, in my opinion, exponentially. One of the advantages that we have in Qatar especially, is the abundance of energy. Data centers need a lot of power, and they need a lot of cheap power, which does not exist in the rest of the world due to many crises that we are seeing in different parts of the world today.
Here in the GCC region, especially in Quatar, we have access to an abundance power at a very attractive price point. When I speak about building data centres in the GCC, the initial reaction from some of the people that I talk to, is that they are shocked. They say, considering the climate in the GCC, “how would you operate a data centre?” But when you go into the details, you find out that normally, data centres are built in cool locations, where you don’t have too much need for power to cool the servers inside the data centre.
But, in an environment where you can see extreme temperatures, if you have enough power, and if that power is available and cheap, you can still operate a data centre at a much lower price than you could do in a cooler country. So that’s the beautiful thing that we have at hand today, that’s one of our advantages.
So, essentially, we would like to be and end-to-end player, we would like to have international connectivity, local domestic last mile connectivity, and location and data centre operations under one roof, and that is very exciting for us.
This is the vision that we have, so that when we sit and start discussing with our larger customers, we can offer them, a single contract, a single point of contact. A company like GBI can give them everything that they need in terms of connectivity and core locations needs.
Join Gulf Bridge International in conversation at next year’s Submarine Networks EMEA, 29th – 30th May 2024 Business Design Centre, London.