MegaFon reconsiders project to lay Arctic Connect fiber-optic line
MOSCOW. May 27 (Interfax) - MegaFon has decided to reconsider the project to lay the Arctic Connect underwater fiber-optic communication line, the Russian mobile service provider told Interfax.
The project involves laying a 10,000-km line with throughput capacity of 200 TBps from Europe to Asia on the bottom of the Arctic Ocean, along the Russian Arctic coast, following the Northern Sea Route. The project, the cost of which was previously estimated at $800 million-$1.2 billion, was supposed to be completely commercial, without government subsidies.
"We have indeed decided to reconsider the structure and economics of the Arctic Connect project. We will need time to regroup. We have done a huge amount of work since 2019, both at sea and on land. All the developments of the project will be used in future if we decide to continue it. We are now informing our partners and suppliers of our decision," MegaFon said.
Business daily Vedomosti, citing sources, reported on Thursday that MegaFon suspended the project due to foot-dragging in negotiations by its Japanese partners. Japanese trade and investment company Sojitz Corporation and its partners are participating in the project under a cooperation agreement signed last year. However, the company's entities, using various, often contrived excuses, are dragging out negotiations on cofinancing the project and providing services to connect customers in Japan to the new network, the paper's sources said.
Plans to carry out the project were announced in the summer of 2019, when MegaFon and Finnish infrastructure operator Cinia Oy formed a consortium to build the underwater fiber-optic line along the Northern Sea Route.
The first stage of marine surveys for the project was completed in November 2020. Sections of the route were surveyed in six seas. In the second phase, there were plans to do detailed studies this summer of the engineering conditions for laying the underwater cable, including studies of seabed rock. The project underwent an environmental impact review by environmental watchdog Rosprirodnadzor, which confirmed the safety of the work.
At the beginning of this year, cooperation agreements on the construction of branches of the line were signed with five regions in the Russian Arctic and Far East: Sakha Republic (Yakutia), Komi, Chukotka, Nenets Autonomous District and Sakhalin Region.