Verizon, partners to build China optical cable

[HenryTo]

FYI:
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RPT-UPDATE 2-Verizon, partners to build China optical cable
Mon Dec 18, 2006 4:20 PM ET

NEW YORK, Dec 18 (Reuters) - Verizon Communications Inc. <VZ.N> said on Monday it and five Asian partners will build a $500 million high-speed optical cable linking the United States and China in a bid to benefit from burgeoning Internet activity in China.

Verizon Business, the unit of the No. 2 U.S. phone carrier that handles corporate sales, and partners China Telecom <0728.HK>, China Netcom <0906.HK>, China Unicom <0762.HK>, Korea Telecom <030200.KS> and Chunghwa Telecom <2412.TW> <CHT.N> will start building the undersea cable in the first quarter of 2007, Verizon said.

The cable will have about 60 times the capacity of existing lines between the United States and China and will be capable of supporting the equivalent of 62 million phone calls simultaneously, Verizon said. Most existing cables between the two countries go through Japan, slowing down service.

Verizon said it expects the cable to be completed in the third quarter of 2008. It said it would likely see a return on the investment from its first year.

The cable will connect a point in Nedonna Beach, Oregon, with landing points in Qingdao and Chongming, China. The cable will also branch out to landings in Tanshui, Taiwan, and Keoje, South Korea, Verizon said.

"This state-of-the-art cable will support high-speed traffic to the world's fastest-growing region -- the Asia-Pacific," said Fred Briggs, Verizon Business executive vice president of operations and technology.

China is one of the fastest areas of Internet growth, with data showing 123 million current Web users. It also has 449 million mobile users, making it the largest cellular market in the world.

Verizon said it is involved in more than 65 undersea cable networks worldwide, with 18 in the Asia-Pacific region.

Telecoms rivals may not be far behind in building out stronger networks to Asia.

No. 1 U.S. carrier AT&T Inc. <T.N> is in talks with Telekom Malaysia Bhd and Singaporean carrier Starhub Ltd. <STAR.SI> to build a cable line linking Southeast Asia and the United States, according to a Wall Street Journal report. An AT&T spokesman had no immediate comment.

Verizon shares rose 8 cents to $36.56 on the New York Stock Exchange