Trans-Pacific Express deal signed for US-China cable

19 Dec 2006

Verizon Business has announced that it has signed a construction agreement with five Asian communications providers — China Telecom, China Netcom, China Unicom, Korea Telecom and Chunghwa Telecom of Taiwan — for the rollout of the so-called Trans-Pacific Express. Ownership will be evenly split among the six participants. Construction is to begin by March and end by the third quarter of 2008 at a cost of USD500 million, the companies said. The cable will stretch 11,000 miles from Nedonna Beach, Oregon, to Qingdao and Chongming in China, and will have landings in Tanshui, Taiwan, and Keoje, South Korea. Ihab Tarazi, vice president of global network planning at Verizon Business, said the cable would add capacity to one of the company’s highest growth areas and improve the speed of data being routed to and from China, Hong Kong and India. Initially the cable will be configured to handle traffic at 1.28 terabits per second (Tbps), but the system will have design capacity of up to 5.12Tbps. Customers can also book individual connections running at 10Gbps.

Yet as fast as it is growing, the demand for high speed telecommunications access to Asia has not yet outstripped the existing supply, according to Stephan Beckert, research director at TeleGeography. In an interview with the International Herald Tribune, Beckert pointed out that the new cable would bring competition to the market, which he said was more important. ‘There is no shortage of ways to get traffic to China,’ Beckert said. ‘But the capacity is concentrated in a very small number of hands. Customers are worried about the diversity of route ownership.’ Most of today’s trans-Pacific traffic is carried by the VSNL International cable. Two other big systems are being considered by competitors, Beckert said, including what could be a third US-China route. ‘Certainly, China is a big destination, and there is a case to be made for additional routes,’ Beckert added.

Tarazi said the Trans-Pacific Express cable system may herald the beginning of a transfer of the centre of Asian telecommunications from Japan to China. While 5,547 gigabits per second of capacity is available across the Atlantic Ocean, only 2,726 gigabits per second exists across the Pacific Ocean, according to TeleGeography statistics.

China, China Netcom, China Telecom Group, China Unicom, Chunghwa Telecom, New Telephone Company (South Korea), Verizon Communications