Global Insight Perspective | |
Significance | The construction of the first next-generation undersea optical cable system linking China and the United States will start in the first quarter of 2007, with completion scheduled in the third quarter of 2008. |
Implications | The new undersea cable will provide greater capacity and higher speeds to support increasing trans-Pacific traffic in voice, data and broadband. |
Outlook | Other telecoms competitors are also aiming for stronger networks to Asia. AT&T could form an alliance with Malaysia's TM Group and Singaporean carrier Starhub to build a cable linking South-East Asia and the United States. |
The new system, to be named Trans-Pacific Express (TPE), will use the latest optical technology to provide greater capacity and higher speeds to meet the significant increase in demand for IP, data and voice communications with the Asia-Pacific region. The new fibre-optic cable can support the equivalent of 62 million simultaneous phone calls, more than 60 times the overall capacity of the existing cable directly linking China and the United States. While TPE will initially provide capacity of up to 1.28 terabits per second (Tbps), the system will have a design capacity of up to 5.12 Tbps to support future internet growth and advanced applications such as video and e-commerce. Individual customers can access the cable system at wavelengths of up to 10 gigabits per second (Gbps).
The initial parties in the consortium consist of China Telecom, China Netcom, China Unicom, Korea Telecom, Taiwan-based Chunghwa Telecom, and Verizon Business—the corporate business unit of Verizon Communications. The cable will have a landing point provided by Verizon Business at Nedonna Beach, Ore., on the U.S. West Coast and will land on the China mainland at Qingdao and Chongming. TPE will also have landings in Tanshui, Taiwan, and Keoje, South Korea. Construction of the new cable system, which will extend more than 18,000 kilometres, will begin in the first quarter of 2007. Completion is scheduled in the third quarter of 2008. The project represents an investment by consortium members of more than US$500 million.
Outlook and Implications
"This state-of-the-art cable will support high-speed traffic to the world's fastest-growing region—the Asia-Pacific," said Fred Briggs, Verizon Business executive vice president of operations and technology. When completed, TPE will complement Verizon's capacity in existing submarine cables in the Asia-Pacific region. The company has ownership in more than 18 cable systems in the Asia-Pacific region including: Japan-United States, China-United States, Southern Cross (United States, New Zealand and Australia) and the SEA-ME-WE-4 cable, put into service in December 2005, linking Europe and Asia.
Other telecoms operators are also planning stronger networks to Asia. AT&T has been reported by the media to be in talks with Malaysia's TM Group and Singaporean carrier Starhub to build a cable linking Southeast Asia and the United States. The consortium could invest US$400 million to US$500 million if the deal is completed.