Magazine article American Banker

Lower-Cost Overseas Satellite Link Offered: Columbia Communications Leases TRW Hardware Needed for Service

Magazine article American Banker

Lower-Cost Overseas Satellite Link Offered: Columbia Communications Leases TRW Hardware Needed for Service

Article excerpt

In a deal that experts say will drive down international communications costs, Columbia Communications Corp. has begun leasing the use of data transmission links from TRW Inc. that are located on two NASA satellites.

The six-year agreement enables Columbia to offer video, data, and private-line telecommunications services to financial institutions and other businesses that need to exchange information between domestic and overseas offices.

"This marks the first time that there will be competition in international satellite communications services," said Keith Collins, a spokesman for Columbia Communications, based in Washington.

"Because we are essentially breaking up a monopoly, there will be a significant and permanent drop in average pricing of these services."

Before the contract between Columbia and TRW, overseas satellite telecommunications was dominated by Intelstat, an international consortium.

With Columbia's entrance into the market, observers expect that financial institutions will be able to replace their land-based communications lines to Europe or Asia for as much as 25% less in fixed costs.

Columbia said it is in negotiating contract to install satellite networks for several large financial institutions, but declined to identify them.

Domestically, a number of banking companies, including First Union Corp., Charlotte, N.C. and Texas Farm Credit Bank, Austin, Tex., have installed a satellite communications network as a cheap and reliable alternative to land-based phone lines. …

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