This category includes domestic and international telecommunication cables and one or more landing stations. The telecommunication cable industry is a rapidly evolving industry with many technical changes. Such projects:
- Are technically complex
- Contain significant equipment and material which may need to be imported
- Have revenues come from a combination of leases, indefeasible rights of use (IRUs) and other sources.
- Have revenues which are difficult to forecast because demand increases rapidly and prices fall equally rapidly. The expected lives of such projects may be short to account for this uncertainty in the market,
- Are subject to ongoing investment for additional circuits at the landing/termination station(s)
- Have an ever present risk of sea damage to cables
- Include a deepwater cable which if located in international waters will be owned by a company incorporated in a tax haven
- Are subject to straightforward taxation calculations
How Promoter handles Submarine Cable Projects
Promoter handles international projects as follows:
- full accounting statements for a new company in each country with a landfall/terminal
- Full accounting statements for the new company owning the deepwater cable
- The user places key coordinates so that Promoter can illustrate the network.
Typical Project Cash Flows
The revenues typically vary over the life of the project, the result of increasing demand offset by correspondingly decreasing prices. The operating costs are minimal but there is an ongoing capital investment in additional circuits. The diagram illustrates the above and the relatively short life assumed for analysis purposes.