Taiwanese operator Chunghwa Telecom and three other telcos from the country signed a contract with China Unicom to collaborate on the €20.7 million 220km cable, which is still subject to final approval by the government.
Named TSE-1, it will run between Tamsui in Taiwan and Fuzhou City in China. China Mobile and China Netcom are also expected to join the consortium. The deal signals a further warming of relations between the two nations since the 2008 election of Taiwan’s president, Ma Ying-jeou.
“The business and economy integration between China and Taiwan is the key drive to increasing communication links,” said Charice Wang, analyst at Ovum consultancy. “The relationships between operators in both regions have been getting closer for the last two or three years as the broadband traffic between China and Taiwan increases by approximately 20% year on year.”
The first Taiwan to China cable, also backed by China Unicom and Chunghwa Telecom, was announced in 2010. When the cable is complete, it will link the coastal Chinese city of Xiamen with Taiwan’s Kinmen Island.
The two cables between them are expected to significantly lower consumer retail tariffs, at present at a high level owing to the need to exchange traffic over indirect links via Hong Kong and Japan. The first cable has been permitted by Chinese regulator MIIT but TSE-1 could face resistance from opposition parties on the grounds of security.
China Telecom has also announced a deal with Indian operator Bharti airtel to build an underground terrestrial link to India. The cable will have 40Gbps capacity and have the capability to transit traffic to key global destinations.
“The high growth of international traffic results from increasing business links between China and India,” said Wang. “There is a fast growth of enterprise customers between the countries and big Indian companies are investing and undertaking business in China.”
