Hibernia Atlantic has begun seabed surveys in advance of the laying of a fibre-optic cable between Ireland and Iceland.
Industry sources indicate that it could cost about €50 million for the US company, which owns and operates a fibre network between Ireland and the US, to lay the 1,350km cable. It will land in Portrush, Co Down.
Bjarni Thorvardarson, Hibernia Atlantic's chief executive, said the firm saw an opportunity because Iceland is only served by a single fibre-optic cable system, Farice 1, which was co-funded by the Icelandic government. Farice 1 connects Iceland and the Faroe Islands to Scotland.
Mr Thorvardarson says many high-tech multinationals are interested in establishing data centres in Iceland because of the low cost of electricity. Iceland makes extensive use of geothermal and hydroelectric methods to generate electricity and is committed to becoming totally reliant on renewable energy.
"However, they need redundant connections to do that and so far Iceland hasn't had that," said Mr Thorvardarson.
The survey of the preferred route began yesterday and will take 25 days. Hibernia Atlantic expects to go to tender for the laying of the cable in November, with the work taking place next summer.
Mr Thorvardarson expects the cable, which will have a capacity of 2 terabits, to be operational in late 2008. Once operational, Iceland will be linked to Hibernia's network which connects 42 cities in the US, Ireland, UK and Europe.
Hibernia Atlantic was formed in 2003 when Columbia Ventures Corporation bought a transatlantic cable that had been laid by Canadian firm 360 Networks in 2001 at a cost in excess of €900 million. CVC paid $18 million for the assets at the time but has subsequently spent about $80 million (€57.5 million) purchasing 12,500km of "dark" fibre on both sides of the Atlantic to build out its network.
The Icelandic project is the first time Hibernia Atlantic has commissioned the laying of new cable rather than purchasing existing assets. The new link will provide ethernet connectivity to Iceland. Yesterday, Iceland's prime minister, Geir Haarde, visited Hibernia Atlantic's cable station in Clonshaugh, Dublin.
