No Slow Boat, Verizon and Asian Telcos To Build New Trans-Pacific Pipeline

Targeting the sustained economic growth in China and the high growth markets in Asia, a consortium of telecom carriers including Verizon, Chunghwa Telecom of Taiwan, Korea Telecom and three Chinese telcos, plan to build an advanced undersea fiber-optic cable linking the U.S. and the Pacific. The "Trans-Pacific Express" project is expected to cost $500 million, split six ways, with construction beginning in Q1'07 and ending by Q3'08. Verizon says the new cable will have 60x more capacity than the current one, allowing 62m simultaneous phone calls. The current, lone U.S.-China cable in operation was completed in 2000 by 14 carriers at a cost of $1b, according to a Wall Street Journal article. The same article says AT&T, Telekom Malaysia, and a Singaporean carrier are discussing building a cable linking S.E. Asia and the U.S., according to people familiar with the matter.
• Sources: Press release, The Wall Street Journal
• Related commentary: Investing in China: Rapid GDP Growth Rates Indicate Prosperous Future, Verizon's Fiber Plans Are Fine But Watch the Balance Sheet, Verizon: 2007 A 'Tipping Point' For Earnings Growth?
• Potentially impacted stocks and ETFs: Verizon (VZ), China Telecom (CHA), China Netcom (CN), China Unicom (CHU), Chunghwa Telecom (CHT), AT&T (T). ETFs: iShares S&P Global Telecom (IXP), Telecom HOLDRs (TTH), Vanguard Telecom Svcs (VOX), PowerShares Golden Dragon Halter USX China (PGJ)

Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.

Comments

[kkin365]

Your heading is objectionable. omooc