Published May 26, 2009

Regional telcos to lay undersea cable network

New system to offer better bandwidth capacity, options

By PAULINE NG
IN KUALA LUMPUR

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A CONSORTIUM of eight regional telcos including Telekom Malaysia (TM) has proposed to develop an 8,000km international undersea cable system that would link 10 countries and territories in the region and offer improved bandwidth capacity and options.

The cable system, referred to as the Asia Pacific Gateway (APG), would connect Malaysia, Singapore, Thailand, Vietnam, Hong Kong, the Philippines, Taiwan, China, Japan and South Korea.

Expected to be operational by end 2011, it would utilise Dense Wavelength Division Multiplexing technologies and have a minimum design capacity of four Terabit/second.

Other consortium members are China Telecom, China Unicom, Taiwan's Chunghwa Telecom, Korea's KT Corporation, Japan's NTT Communications, the Philippines' PLDT and Vietnam's VNPT, TM said in a statement yesterday following the formalisation of the consortium by the signing of a memorandum of understanding among the telcos.

The company's statement did not mention the cost of APG but noted the system would help meet the explosive surge in data, voice and video traffic demand, as well as enhance reliability by providing more diversity and resiliency for traffic generated throughout the Asia-Pacific and trans-Pacific regions to the United States.

TM chief operating officer Adnan Rofiees said the APG would enhance the survivability of all these cables during simultaneous submarine cable cuts (in seismic-prone areas), 'like what happened in 2006'.

The biggest fixed line player in Malaysia, state-controlled TM has had to grapple with shrinking demand in the segment. It has increased its investments in Internet broadband services, one such local project being the national roll-out of a High Speed Broadband service over the next 10 years.

The telco intends to invest nearly RM9 billion (S$3.72 billion) with the government putting in about RM2.4 billion. In addition to the APG, it is also a member of a number of other regional submarine cable consortia.

By July, the 20,000km Asia America Gateway optical fibre submarine cable linking South-east Asia directly to the US - built by a 17-member consortium led by TM - is to begin carrying commercial traffic. Given its extensive global connectivity - it owns or leases capacity on more than 10 submarine cable systems spanning over 60,000 fibre-route miles - TM said it intends to position the country as a regional Internet hub and digital gateway.

Even so, the telco has warned shareholders to expect a challenging year. In the first quarter to end March, its net profit tumbled 95 per cent to some RM28 million, mainly owing to the de-merger of its mobile unit and foreign exchange losses of about RM176 million.