Asia cable call imminent

THE future of a Singapore-Perth optic fibre link is expected to be announced within weeks.

While the proponent of the project, Singapore Telecommunications (the owner of Singtel Optus), itself remains non-committal, the signs are the company is preparing to set in stone plans for the multi-million dollar project.

Singtel last year opened the door on what it calls the A2A (Asia to Australia) cable. It would run from Changi in Singapore through Ancol in Indonesia and down to Perth, a distance of 4,600 kilometres.

In January Singtel said it was discussing the proposed undersea network with several parties. The company estimated the project would cost less than $US150 million to complete and would be ready for service by early 2003.

The A2A cable would have a design capacity of 1.92 terabits per second (one terabit = 1,000 gigabits) and would be the first terabit-capable submarine cable system to enter Australia.

Speaking in Perth last week, Singtel Optus chief operating officer Paul O’Sullivan confirmed discussions about the cable’s future were continuing, though he could not provide an update on those discussions.

“We’re going to have more to say on that at a future date,” was the most concrete statement he made on the matter. Mr O’Sullivan said: “There will be a need … ” but did not finish this statement.

It can be presumed, however, that the need to which he referred was for an Asia-Australian link, which would complement Singtel’s existing and planned Asian network.

Singtel’s 59 per cent-owned subsidiary C2C Pty Ltd last year completed the laying of its $US2 billion, 17,000km C2C (city to city) undersea cable that connects Japan, South Korea, Taiwan, Hong Kong, the Philippines, Singapore and China. Singtel has also laid a cable connecting Singapore to India.

To add a sense of urgency to discussions on the A2A project, Singtel last week announced it had signed a Memorandum of Understanding with the Communications Authority of Thailand (CAT) and Indonesia’s PT Telkom to jointly explore the construction of a high-capacity optic fibre submarine cable system linking Indonesia, Singapore, Thailand and possibly Malaysia.

The company said this proposed cable network was estimated to be completed by mid-2003.

Like the C2C cable, the proposed A2A cable would use Dense Wavelength Division Multiplexing (DWDM) technology, allowing easy linking of the two networks.

Numerous Australian companies are understood to be privately excited about the possibilities offered by a high-bandwidth link from Australia through Asia, and into China in particular. There are expectations that as China continues to open up to foreign investment, Australia will be well placed to become a major player in numerous industries.

The A2A cable would also help to justify Singtel’s investments in Australia before its purchase of Optus last year. In January 2001 Singtel signed a $US10 million deal with Perth-based Amcom Tele-communications Ltd to secure the first major pre-sale of capacity on Amcom’s IP1 long-haul fibre link between Australia’s eastern and western seaboards.

On the other hand, Singtel’s willingness to spend billions of dollars in the past year might force it to reconsider the short-term viability of the A2A cable.

After paying $14 billion for Optus last year, earlier this month Singtel announced a $1 billion write-down on Optus’ pay-TV assets to $600 million. The company also has to consider its expenditure on the Asian cable projects, its $US1 billion purchase of a 35 per cent stake in Telkomsel (the mobile phone subsidiary of PT Telkom), and a $650 million investment in the Bharti Group of India.

According to one industry source, if a decision on A2A were made in the next few weeks it would still be possible for Singtel to lay the cable and have it ready for use by the end of 2002. The source said the actual cable laying was not a greatly time-consuming task, but if Singtel was still seeking tenders for the project, it could be up to two years before the project would be completed.