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Verizon, partners to build US-China optical cable

(Reuters)
Updated: 2006-12-19 09:04

Verizon Communications Inc. and five Asian partners plan to build an underwater optical cable between the United States and China to meet rising demand for high-speed Internet access.

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

The project, called Trans-Pacific Express (TPE), will cost the consortium more than $500 million, Verizon said.

Verizon, China Telecom, China Netcom, China Unicom, Korea Telecom and Chunghwa Telecom will start building the cable, which will extend more than 18,000 km (more than 11,000 miles), in the first quarter of 2007.

Construction is expected to be completed in the third quarter of 2008, Verizon said in a statement, adding that it would likely see a return on the investment from its first year.

"This state-of-the-art cable will support high-speed traffic to the world's fastest-growing region -- the Asia-Pacific," Fred Briggs, executive vice president of operations and technology at Verizon Business, said in a press statement. Verizon Business is the division of the No. 2 U.S. phone carrier that handles corporate sales.

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

The cable will connect a point in Nedonna Beach, Oregon, on the U.S. West Coast, 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 in its statement.

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

Telecoms competitors are also planning stronger networks to Asia.

No. 1 U.S. carrier AT&T Inc. is in talks with Telekom Malaysia Bhd and Singaporean carrier Starhub Ltd. 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 6 cents to close at $36.54 on the New York Stock Exchange.



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