China To Rule Telecommunications Beneath The Sea – In the contest between the US and China for dominance over the world’s technology infrastructure, the latest battle is taking place under the Pacific Ocean.
While the US has been upping the pressure on its allies not to include equipment made by Chinese telecom giants like Huawei and ZTE in their 5G systems, Chinese companies have gained a foothold in some of the world’s most essential communications infrastructure – undersea internet cables.
Almost all global data communications flow through cables under the ocean – just one per cent travels by satellite – and Chinese companies have quietly been eroding US, European and Japanese dominance over the backbone of the internet, the undersea cable market.
Now, they have trained their sights on connecting one of the most virtually remote parts of the globe, the Pacific Island countries. Of the 378 cables currently operating worldwide, 23 are under the Pacific. But many of these cables run right by Pacific Island nations on their paths between hubs in Los Angeles, Tokyo and Singapore.
Despite the volume of data flowing under the Pacific Ocean, just half a million of the 11 million people living in Pacific Island countries and Papua New Guinea – less than five per cent – have access to a wired internet connection and only 1.5 million to a mobile connection, according to the United Nations Economic and Social Commission for the Asia Pacific (UNESCAP), compared with 53 per cent of people in Thailand and 60 per cent in the Philippines.
More than US$4 billion worth of cables are to come into service by 2021, continuing a trend in which US$2 billion worth of cables have come online every year since 2016, and six of these cables will connect Pacific Island countries.
The push to connect Pacific Island nations to the latest generation of internet infrastructure has received extra scrutiny from the US and its allies like Australia over the involvement of Chinese tech companies.
SECURITY CONCERNS
While the US has moved to block Huawei from supplying equipment to its allies’ 5G networks, experts say Chinese tech companies could contest the US, EU and Japan’s long-standing dominance over global data traffic through investments in subsea cables.
Chinese tech giants like Huawei have entire divisions devoted to undersea connectivity that have laid thousands of kilometres of cable, and Chinese state telecommunication companies such as China Unicom have access to many of the existing trans-Pacific cables.
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But a panel led by the US Department of Justice has held up a nearly complete trans-Pacific cable project over concerns about its Chinese investor, Beijing-based Dr Peng Telecom & Media Group.
The project, the Pacific Light Cable Network, could be the first cable rejected by the panel on the grounds of national security – despite being backed by American tech giants Google and Facebook – setting a precedent for a tougher US stance on Chinese involvement in subsea cables.
Craige Sloots, director of sales at Southern Cross Cable Network, which operates the largest existing sets of trans-Pacific cables, said for any new cable, regulators were likely to scrutinise the ownership of the companies involved and the maker of the project’s equipment.
These two factors, said Sloots, “pragmatically limit some of the providers you can use if you want to connect through the US”. Experts say that Hong Kong, where the stalled Pacific Light Cable would land, was previously considered a more secure shore landing point than mainland China.
But people close to the project say the recent unrest in the city has made this distinction less relevant, according to The Wall Street Journal. If these nations want to be part of the international economy, they need reliable communications.
Similar concerns caused a proposed Huawei-backed cable linking Vanuatu with Papua New Guinea to be called off last year after Australia stepped in to fund its own cable instead.
Just months after the government-owned Solomon Islands Submarine Cable Company agreed to the project with Huawei in mid-2017, Canberra put up US$67 million to connect Sydney with the Solomon Islands and Papua New Guinea with cables laid under the Coral Sea by Nokia’s Alcatel Submarine Networks.
Simon Fletcher, CEO of Vanuatu company Interchange, which had been planning another cable in the neighbourhood connecting Vanuatu with the Solomon Islands, said the Coral Sea project undercut the viability for small private businesses to operate in the fledgling market, where services had historically been provided by international organisations like development banks.
His company’s cable has been on pause since the announcement of the Coral Sea project, though Fletcher said it would go forward next year. Continue reading
