China and the US start a war on submarine cables

Before the administration of US President Joe Biden announced a series of additional trade barriers targeting semiconductor chip exports to China in mid-2022, US submarine cable company SubCom won the bid for the Southeast Asia – Middle East – Western Europe 6 (SeaMeWe-6) fiber optic cable project.

SubCom recently began laying the Singapore-France cable and revealed details about how Huawei Technologies, China's leading telecommunications infrastructure company, lost the bid for the cable connecting Singapore to France.

The SeaMeWe-6 submarine cable connects Singapore with Marseille (France), passing through Malaysia, Bangladesh, Sri Lanka, Maldives, India, Pakistan, Djibouti, Saudi Arabia, Egypt, Greece and Italy. The project is expected to be completed in the first quarter of 2025.

According to an article published on Reuters on March 24, HMN Technologies (formerly known as Huawei Marine Networks) has been selected as the main contractor for the SeaMeWe-6 project with a total value of 500 million USD - only 1/3 of the cost proposed by SubCom.

However, due to the intervention of the US government, Huawei had to abandon the project. The US Department of Commerce put pressure on investors to choose SubCom. The US Trade and Development Agency (USTDA) also funded a $3.8 million training fund on submarine cables for five telecommunications companies in France and Singapore.

In February 2021, SubCom lowered its bid to $600 million, while HMN reduced it to $475 million.

In late 2021, a SingTel executive who chairs the investor representative committee called for a vote on the bidder.

Chinese investors including China Telecom and China Mobile, which hold 20% stakes in the project, have been unable to change the decision of other members to choose SubCom, despite the two investors threatening to leave the project.

On February 21, 2022, SubCom announced that it had won the project to install 19,200 km of submarine cables. The two Chinese investors decided to withdraw from the project and were later replaced by Telekom Malaysia Berhad and PT Telekomunikasi Indonesia International. Only China Unicom remained involved in the project.

Over the past four years, the United States has intervened in six private submarine cable projects in the Asia-Pacific region, calling on investors to boycott Chinese contractors or asking American technology corporations to redirect submarine cable segments from Hong Kong (China) to Singapore and Taiwan (China).

In April 2020, then-US President Donald Trump signed an executive order establishing an interagency committee called Team Telecom with the aim of preventing cyberattacks and espionage targeting US telecommunications networks.

Since then, four cables between the US and Hong Kong (China) have been asked to redirect their terminals from the special administrative region to other areas including Taiwan (China) and Singapore. US companies such as Google and Meta have also participated in this project.

Francis Fong, chairman of the Hong Kong Interactive Marketing Association, said that as more and more cables connect regions, Hong Kong will gradually lose its appeal to foreign technology companies due to slow Internet speeds.

However, Mr. Fong pointed out that the Chinese government has begun laying more submarine cables in recent years to reduce its dependence on foreign entities. Beijing has also built more cables connecting to the BRICS countries (Brazil, Russia, India and South Africa).

In November 2022, Singtel - one of the major telecommunications groups in Singapore - cooperated with 5 other telecommunications companies to sign a contract worth 300 million USD to build the 6,000 km long Asia Link Cable (ALC) system connecting Hong Kong (China), Singapore, the Philippines, Brunei and Hainan province (China). The project is expected to be completed in the third quarter of 2025.

“The ALC will deliver improved connectivity to help industries transform, unlock more innovation opportunities, further enhance the digital experience of Southeast Asian consumers and contribute to the region’s growth,” said Bill Chang, Managing Director of Singtel’s Regional Data Centre Business and Enterprise Group.

According to Tin Tuc Newspaper