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Equinix (EQIX) Helps to Build FASTER Marine Internet Cable

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Data center company, Equinix Inc.EQIX has scaled a new level of technological success in the field of subsea communications by backing the development of a high-speed underwater cable network between the U.S. and Asia.

The company will help to build the fiber-optic cable system, FASTER, on the Trans-Pacific route connecting the U.S. and Japan. As is evident from the name of the project, the latest subsea cable system can support channel rates of 60Tb/s.

The FASTER cable system will be connected to four of Equinix's International Business Exchange (IBX) data centers. Therefore, the platform and its customers can leverage Equinix's mature business ecosystems and interconnection platform - Platform Equinix.

According to Visual Networking Index (VNI) Global IP Traffic Forecast, released by Cisco (CSCO) in May 2015, there will be approximately 3.9 billion global Internet users by 2019, up from 2.8 billion in 2014. Also, the forecast indicates that by 2019 there will be around 24 billion networked devices and connections worldwide, up from 14 billion in 2014.

Hence, the latest project will help Equinix to further spread its reach and offer better user experience. If successful, Equinix's latest move will bolster its customer base, which will ultimately translate into more revenues for the data center company. Moreover, it will help it to develop a fast and reliable network infrastructure with extra bandwidth, which could benefit the company in strengthening its foothold in new markets.

Last Words

There is no denying the fact that these submarine networks are technologically advanced and will greatly help operators to obtain maximum benefits and tap new sources of revenues. Management expects demand to step up instantly for the highly advanced subsea cables as these will greatly reduce signal loss and improve the quality of transmission.

We believe Equinix's recent drive to support submarine networks is noteworthy considering increased demand for ultra-high spectrum capacity from new datacenters. Going forward, these technological innovations will likely act as key profit drivers.

To conclude, expansion in important markets and consolidation of facilities in existing ones has been a part of Equinix's core strategy. The company is continuously striving to boost its revenue base as well as profitability by improving its technology. Moreover, its recurring revenue model has provided much-needed support to the company's revenue stream over the years. The company's cloud and IT service businesses are its fastest growing segments and account for approximately one fourth of the total revenue.

Nonetheless, Equinix competes with Internet data centers operated by established communications carriers like AT&T T , Level 3 Communications LVLT and Verizon Communications VZ .

Currently, Equinix has a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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