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12/18/2006
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Verizon Joins Asian Consortium Building $500 Million U.S.-China Network

The new cable will be able to support 62 million simultaneous phone calls, which is 60 times more than the capacity of the existing cable linking the two nations.

Verizon Business said Monday that it has signed an agreement with a group of Asian telecommunications firms to build an advanced undersea optical cable system linking China with the U.S. mainland.

The consortium will spend more than $500 million on the Trans-Pacific Express project, according to Verizon Business, a unit of Verizon Communications.

The new cable will be able to support 62 million simultaneous phone calls, which the Verizon says is 60 times more than the capacity of the existing cable linking the two nations.

"This state-of-the-art cable will support high-speed traffic to the world's fastest-growing region, Asia Pacific," says Fred Briggs, Verizon Business' executive VP of operations and technology. "Our leadership in this project builds on our important existing relationships in China, further recognizes the emergence of China as a diverse communications hub for Asia, and reflects our company's commitment to help U.S. and other global companies compete worldwide."

Verizon's partners in the consortium include China Telecom, China Netcom, China Unicom, Korea Telecom, and Chunghwa Telecom of Taiwan.

The cable system, which will jump off from the United States in Nedonna Beach, Ore., will extend more than 18,000 kilometers. Construction is scheduled to begin in the first quarter of 2007 with completion slated for the third quarter of 2008. The cable will link several Asian and Pacific locations with the United States.

The cable network is among a group of new endeavors linking the United States with Asian, Pacific, and other foreign lands that host many U.S. outsourcing projects.

Last year, Indian telecom company Videsh Sanchar Nigam Ltd. acquired for $130 million the Tyco Global Network from Tyco, which was embroiled in an accounting scandal. At the time, the acquiring firm said the network had been valued at $3 billion (during the technology bubble). A group of U.S. senators said the submarine cable network controlled more than 80% of the total trans-Pacific undersea capacity.

The Videsh Sanchar deal was approved by the U.S. Committee on Foreign Investment Inside the United States, a federal security panel.

Existing cable networks between the United States and China and other Asian nations are reaching capacity, making the planned new network a necessity, Verizon says. Briggs says the new cable's advanced technology will "add capacity and the higher-speed service customers are demanding." Verizon already has ownership in 18 cable systems linking the United States and nations across the world.

The Trans-Pacific Express project is designed to support future growth, including the capability of handling advanced video and e-commerce applications. Customers will be able to access the system at speeds up to 10 Gbps, according to Verizon.

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