TORONTO, ONTARIO, CANADA – October 3, 2012 – Arctic Fibre Inc. has applied to Industry Canada for submarine cable landing licences under provisions of the Telecommunications Act, 1993.

“Our application for both a terminating cable licence and for a through cable licence reflects the dual purpose of our network” said Douglas Cunningham, President of Arctic Fibre Inc. “We will be transmitting international signals on a low latency basis (159 milliseconds RTD) between Japan and the United Kingdom on two express pairs at 100G.”

The third fibre pair within the cable will be devoted to the carriage of signals between Japan and the northeastern United States through an existing landing station at Milton in the province of Newfoundland and Labrador and then transmitted southward through terrestrial and subsea fibre networks to the United States.

“A fourth cable pair is dedicated to providing a pathway to the information highway for 79,000 people residing in Alaska, Nunavut, the Nunavik region of Northern Quebec and Northern Labrador who are currently dependent upon high cost and extremely limited satellite bandwidth,” said Cunningham.

Based upon the response to Arctic Fibre's Open Season capacity nomination process, the fourth fibre will provide “virtually unlimited” bandwidth to 52% of the Nunavut population living along the backbone in Cambridge Bay, Gjoa Haven, Taloyoak, Igoolik, Hall Beach, Cape Dorset, and Iqaluit.

Negotiations are ongoing with a major American carrier to construct spurs into the Alaskan communities of Nome, Kotzebue, Wainwright, Barrow and Prudhoe Bay who face similar problems accessing the information highway.

“A proposed landing at Tuktoyaktuk in the Northwest Territories has been abandoned due to the high capital costs of ploughing 233 km of fibre into the ever shifting gravel of the Mackenzie Delta,” said Cunningham. “Carrier commitments on the Tuk spur were negligible perhaps reflecting the fact that terrestrial fibre may be extended to the area through a proposed Mackenzie Valley route or alongside the Dempster Highway when it is rebuilt over the next few years.”

No subsidization is required for the Nunavut communities living alongside the backbone due to sharing of the cable with international traffic and marine surveys will be undertaken next summer with a projected backbone inservice date between Tokyo and London of November 2014. The company expects to spend approximately $30-$31 million on capital expenditures within Nunavut in the next two years.

An additional $161 million of capital contribution or about $21 million per annum in annual revenue or subsidies will be required to construct spurs off the backbone to service Labrador through Nain; the Nunavik region through several spurs at Kuujjuaq, , Kangirsuk, Quaqtaq and Salluit; the Kivallik region as far south as Arviat; and as far as Pond Inlet on Baffin Island through an underwater branching unit in the Davis Strait.

Arctic Fibre has been in discussion with various provincial and territorial governments and will be filing a proposal with Industry Canada in the near term for the construction of the spurs in 2015-2016. “Our discussions with the Nunavut Government last week clearly indicate strong support for our project and their desire to transition the bulk of their telecommunications requirements from satellite to fibre once their existing satellite contracts expire in 2016,” added Cunningham.

“Newfoundland missed the boat in 2009 when TeleGreenland built from Newfoundland to Nuuk,” noted Cunningham. “I don't think the boat will be passing by Nain this time without stopping.”

“All levels of government recognize the superior cost performance characteristics of fibre relative to satellite and how extension of fibre will reduce the overall cost of providing government services notably in the areas of telemedicine, distance education and administration of justice.”

Arctic Fibre believes that notwithstanding some technical improvements to satellite throughput, there is no way that satellite can be cost competitive with fibre on a per megabit which is one of the primary reasons almost 99% of international traffic is carried by fibre. Arctic Fibre's initial rates in Nunavut represent an 80% price reduction to satellite costs and will improve further as economies of scale are realized.

Arctic Fibre completed detailed seabed studies in August covering the entire 15,079 km route between London and Tokyo as well as the 2,210 km Labrador backbone between Newfoundland and Labrador. Additional routing work was undertaken on the spurs. Arctic Fibre has used this desk top study and engineering design work to call for turnkey proposals to construct the network on the basis of 100G wavelengths as opposed to the original 40G concept.

“Based upon the results of the initial transatlantic and transpacific 100G applications, and terrestrial 100G performance, Arctic Fibre is confident of the ability of the suppliers to build a resilient upgradeable system which will have a lifespan of 25 plus years,” he added.

Arctic Fibre has met with international carriers on an ongoing basis during the past three years and will move to the contractual stage between now and the end of the year. “International telecommunications traffic continues to grow at 35%-40% per annum, said Cunningham.”Notwithstanding significant price deflation, particularly across the Pacific, our project remains viable due to carrier demand for a low latency, physically diverse, technically secure, politically neutral network.”