ATHENS (Reuters)–Telecommunications companies from the Balkans and Eastern Europe signed a $51 million deal on Wednesday to build a fiber optics cable aimed at upgrading the region’s network by 2000.
Led by Greece’s OTE Telecom–which has a 30 percent stake in the Black Sea Fiber Optic Cable System the project will provide a large capacity–high quality telecommunications route at a low cost for at least seven countries–OTE said in a statement.
Armenia’s ArmenTel–Bulgaria’s BTC–Cyprus’ CYTA–Russia’s WESTELCOM–Slovenia Telecom and UKRTELECOM of Ukraine also signed the agreement at a central Athens hotel.
AT&T–Deutsche Telekom–Croatia’s HT and Japan’s KDD also participate in the project.
The cable will connect Bulgaria–Russia and Ukraine with coastal access to their ports of Varna–Novorossiysk and Odessa respectively–OTE said.
"The BSFOCS will be a modern–low cost telecommunications highway–which will connect countries in the region with Western and northern Europe–Africa–the Far East–Australia and beyond," Greek Transport Minister Tassos Mandelis said during the signing ceremony.
Construction of the project was assigned after an international tender to ASN ALCATEL and TYCO–which are expected to deliver by mid-2000.
International telecoms firms in the United States–Middle East and Asia would participate in financing the project in return for a share in ownership–OTE said.
OTE–which was recently listed on the New York stock exchange–has been expanding in the Balkans–buying into Serbia’s and Romania’s state telecoms.
The Greek state-controlled company will preside over the project’s managing committee.
"BSFOCS is expected to be a profitable investment for OTE," Mandelis said. "We foresee a sizable demand for space in this cable–with subsequent revenues for the owners."
OTE said the cable was part of its international strategy–aimed at making the company an important telecoms center in the region and securing a substantial share in international markets at a time of increasing competition.