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Morgan Stanley
The Global Business News Leader | Thursday, 27 September 2007
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17 Firms to Build $500M Undersea Cable

By Sean Yoong
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Posted 27 April 2007 @ 06:16 am EST

KUALA LUMPUR, Malaysia - Seventeen major telecommunications companies signed a pact Friday to build a $500 million undersea fiber optic cable between Southeast Asia and the United States they claim will be relatively safe from earthquakes and tsunamis.

The link will offer "a timely increase in both the capacity and diversity of Internet links between Asia and the U.S., bearing in mind the disruptions caused by the recent Taiwan earthquake," Abdul Wahid Omar, chief executive of Telekom Malaysia, said at the signing ceremony.

Internet users will get faster and more reliable service once the high-bandwidth cable starts operating in December 2008, he said.

Telekom Malaysia, which is leading the consortium of companies, said construction of the 12,428-mile link would begin immediately. It said it would be the first submarine cable system linking Southeast Asia directly to the United States.

The fiber optic cable, dubbed the Asia-America Gateway, will connect the U.S. West Coast with Malaysia, Singapore, Thailand, Brunei, Hong Kong, the Philippines, Guam and Hawaii, as well as offer "seamless interconnection" for those locations with Europe, Africa and Australia, Telekom said in a statement.

It will "provide an alternative and a more secure link for traffic from the region to the U.S.A.," Telekom said. "This low-risk route was designed to avoid the volatile and hazardous Pacific Ring, thus mitigating the effects from natural disasters like earthquakes and tsunamis."

A magnitude 7.1 quake snapped undersea cables near Taiwan on Dec. 26, disrupting phone and Internet communications across Asia as companies scrambled to reroute traffic through satellites and undamaged cables. Services were gradually restored in the days after the quake.

Malaysian Communications Minister Lim Keng Yaik said the cable will strengthen communications and business ties between Asia and the United States by ramping up international broadband capacity at competitive costs.

"This impressive joint effort will go a long way in increasing broadband uptake in this region, which will in turn increase the overall appeal for global investments and increase the competitiveness of the countries," Lim said.

Parties involved in the project include AT&T Inc. from the United States, the British Telecom Global Network Services, Eastern Communications Philippines Inc., India's Bharti AirTel, Thailand's CAT Telekom, Indonesia's Indosat and PT Telkom, Telecom New Zealand International, Singapore's StarHub and Australia's Telstra.

Paris-based Alcatel-Lucent and Japan's NEC Corp. have been awarded the contract for the construction of the link, officials said.
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