China Exports Tech Via Submarine Cable, Plans To Link Cameroon-Brazil

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Written by Dana Sanchez

Chinese telecom giant Huawei and other government-owned carriers are making deals to lay transcontinental submarine cables connecting East Africa and South America after the industry watchdog gave the go-ahead to export Chinese information technology, ChinaDaily reported.

It’s a way for China to expand its global reach, according to ChinaBusinessNews.

China will encourage local companies to go abroad in 2016 and help build and operate overseas telecom projects, said Miao Wei, the industry and information technology minister, in an annual work report last week.

Huawei Marine Networks Co Ltd. is a joint venture between Huawei and U.K.-based Global Marine Systems Ltd. In October, the company said it was building a 6,000-kilometer cable project connecting Cameroon and Brazil.

Government-owned carrier China United Network Communications Group is an investor in the project.

Government support alone is not enough for Chinese companies to go big abroad, said Cao Shumin, president of the China Academy of Information and Communications Technology. Companies must also use their tech advantage to expand their international horizons, according to ChinaBusinessNews.

Based in Tianjin, China, Huawei Marine beat out France’s Alcatel-Lucent and Japan’s NEC Corp. to win the bid, according to ChinaDaily.

The project, scheduled to be completed by 2017 for an undisclosed amount, will be a major data link between Africa and South America, according to Huawei Marine.

The Chinese company is using “a self-developed technique” that it said can reduce construction costs. Its cable can transmit 32 terabytes of data per second across the Atlantic.

Analysts say construction costs for burying undersea cable exceed $200,000 per kilometer, ChinaBusinessNews reported.

China plans to focus in 2016 on connecting countries such as Egypt, Burkina Faso and Cameroon with the rest of the world using the latest telecom infrastructure, Miao said.

“The government is increasing investment in Africa, which gives Chinese IT companies bigger options to land deals,” said Sun Pishu, CEO of Chinese server maker Inspur Technologies.

Other telcoms are making deals to lay submarine cable.

These include cash-rich carriers China Unicom and China Telecommunications Corp, which agreed to join global firms in building a 13,000-kilometer, cross-Pacific fiber-optic submarine cable connecting China, South Korea and Japan with the U.S. The New Cross Pacific project is scheduled to be operation by 2018, ChinaDaily reported.

In 2014, two subsidiaries of China Mobile and China Telecom joined a Google-led project to build a $300-million trans-Pacific cable.

This move by Chinese telecom companies to lay deep ocean cables could prove to be a master stroke in terms of their global expansion plans, according to analysis in ChinaBusinessNews. “With other major carriers like China Unicom and China Telecom in talks to construct a … fiber-optic submarine cable that would connect the Far East with U.S., it is time that Huawei also stepped up its game … This project could also lead other Chinese companies to follow suit and pursue submarine routes to global recognition.”