Google Plans a New Fiber-Optic Network

Google’s Goals

Google (GOOGL) is planning to build a fiber-optic network that will connect Saudi Arabia and Israel, two historical enemies, for the first time. The new cable will also create a new corridor for internet traffic between Europe and India. Through the project, Google also hopes to fix internet issues in various parts of the world. For example, the cable could help with congestion and prevent outages in Egypt. Currently the country is at a high risk for internet outages, which are caused by cables breaking beneath busy shipping lanes in the Red Sea.

The project will allow Google to stay competitive with Facebook (FB) in the fiber-optic landscape. Recently the two companies have been racing to expand their network capacity as users around the world engage with an increasing amount of content on the internet.

The new network will also give Google the ability to launch data centers around the world and compete with Microsoft (MSFT) and Amazon (AMZN) for market share in the world of on-demand cloud-computing.

Building Blue-Raman

Google names most of its internet cables after scientists, and the new route will be called Blue-Raman in honor of Chandrasekhara Venkata Raman, an Indian physicist. Blue-Raman will be more than 5,000 miles long and could cost up to $400 million.

Google will likely partner with telecom companies that would help fund the initiative and share the fiber-optic infrastructure once it is completed. These partners could include Omantel, Telecom Italia, and others.

Geopolitical Considerations

The Blue-Raman project is still in its early stages and a number of negotiations still need to be completed. The cable will cross multiple borders and one regulatory disagreement could mean that the project will need to be redesigned.

However, a series of recent peace deals brokered by the US has made negotiations surrounding Blue-Raman easier. Earlier this year, the UAE, Bahrain, and Sudan formalized government relations with Israel’s Prime Minister Benjamin Netanyahu. Internet cable projects through this part of the world have been politically contentious in the past, but Google hopes the new agreements will make this one easier.

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