The National Communications Commission (NCC) acknowledged that the cable, completion of which is expected by March 2012, will greatly reduce the cost of communications between the two countries. Traffic at present flows indirectly via third party countries such as Japan.
The 220km link will connect the coastal Taiwanese town of Tamshui and Fuzhou city in south east China.
Chunghwa Telecom will fund 50% of the project with Taiwanese partners Taiwan Telecom and Far EasTone Telecommunications, while leading Chinese telecoms operators China Telecom, China Mobile and China Unicom will provide the rest of the $33m.
Taiwan and China have been bitter political and commercial rivals for decades, but a mood of détente has been fostered since Taiwan elected Ma Ying-jeou as President in May 2008 on the ticket of boosting commercial ties with the mainland. Corporate data traffic between Taiwan and China has increased hugely as a result, providing the rationale for a direct cable connection.
Chunghwa Telecom said it expects voice traffic to account for no more than 2% of the system’s bandwidth. With all three Chinese operators developing a 3G offer, and evaluating 4G, mobile data is likely to add to demand for cross-strait capacity. Corporate adoption of cloud computing, in both countries, is also likely to add to traffic on the route.
