Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Germany
Hong Kong
USA
Switzerland
Singapore
United Kingdom
Stretching more than a million kilometres worldwide, the global submarine cable network spans carry about $10 trillion worth of daily financial transactions. Various data, from social media posts to credit card transactions, pass through these cables, that carry over 90% of global data traffic. Thus, controlling and managing this market offers significant leverage to any country, both political and economic.
Over the past years, China has been battling the US in a race to control the global submarine cable network. It has significant investments into the undersea cable market that were relatively recent, compared to the US. In just a few years, China has already emerged as a major player in the market, hosting five of the world’s top seven submarine cable companies.
Meanwhile, India is joining the foray and is looking to take advantage of its geographic location to build the first submarine cable system originating from the country. This network is also expected to become the largest international submarine cable system centered in India.
China heading the submarine cable network race
China’s emergence into the global submarine cable market began with President Xi Jinping’s announcement of the country’s Belt and Road Initiative (BRI) in 2013. Also known as One Belt One Road, China’s BRI is the largest infrastructure project globally, covering railway, energy pipeline, highway projects, and port developments.
Within the BRI strategy is the Digital Silk Road (DSR) initiative. The Chinese government’s strategic documents stated that the DSR aims to expand the submarine cable network in the oceans and the Mediterranean Sea. In its Made in China 2025 plan, the government said it wants to capture 60% of the global fiber optic market by 2025.
In line with the initiative, Chinese telecoms, including Huawei, China Telecom, China Mobile, ZTE, and China Unicom, have made significant investments in submarine cable network construction and maintenance. Chinese telecoms state-owned enterprises (SOEs) have joined major international consortia to construct these submarine cables. This includes a 14,530-kilometre West Africa Cable System that runs through the entire west coast of the continent to link South Africa to the UK.
Another notable project is Hengtong Group’s Pakistan & East Africa Connecting Europe (PEACE) cable system. The Chinese maker of advanced submarine-grade fiber recently aquired Huawei Marine Networks – now rebranded as HMN Technologies. PEACE begins from a Chinese-operated port in Gwandar, Pakistan and runs through several landing sites, including Djibouti, Kenya, Seychelles and South Africa. It also branches out to Europe via a landing site in Marseille, France.
Meanwhile, China Mobile has a major stake in the 37,000-kilometre 2Africa cable network, which will interconnect 23 African, Middle Eastern, and European nations. It will also extend to Asia through the main Europe-to-Asia subsea cables.
US concerns over data security woes
The US and its allies have repeatedly raised concerns about data security over submarine cable networks with Chinese participation. According to them, there is a risk that the Chinese government would use its SOEs involved in these projects to steal data for commercial and military reasons. This has led to the suspension of some major investments in certain projects.
For example, back in March, Facebook announced that it would leave the consortium for the Hong Kong-US undersea cable system that could potentially connect Los Angeles to Hong Kong. The social media giant based its decision on warnings by the US government regarding the participation of Chinese companies in these projects.
The US also warned about the Hengtong’s PEACE network. The maker of advanced submarine-grade fiber is currently under an anti-dumping investigation by the European Commission.
Furthermore, Hengtong’s daughter HMN Technologies just lost a bit for the East Micronesia Cable system due to security concerns, as Reuters reports. According to a Reuters source, all three bids were deemed non-compliant, “given there was no tangible way to remove Huawei as one of the bidders”. The project plans a cable leading to Guam, a US territory with substantial military assets.
India: emerging player in submarine cable market
While China and the US continue their tech rivalry, India is making its way into the submarine cable market through Reliance Jio Infocomm’s proposed international cable system. Jio will work with several key international partners on these projects, along with submarine cable supplier SubCom.
As per Mathew Oommen, president of Reliance Jio, the initiatives India-Asia-Xpress (IAX) and the India-Europe-Xpress (IEX) will cover 16,000 kilometers and are expected to be completed within two years. The IAX will connect India to Asia-Pacific markets from Mumbai and Chennai to Thailand, Malaysia, and Singapore. Meanwhile, the IEX will connect the country to Europe via a landing point in Savona, Italy, and additional landing points in the Middle East and North Africa.
Oxford Information Labs’s Emily Taylor pointed out to Asia Financial that India could use its position as a non-aligned country in the US-China tensions as an opportunity to attract customers for its undersea cable network.
