Asia Netcom is in talks with Google, NTT, KDDI and Singapore Telecom about taking a commitment in its planned Pacific undersea cable project. Eyeing a year-end confirmation for arrangements, Asia Netcom CEO Bill Barney told CommsDay that all five players were looking to access new capacity between Asia and the US. Asia Netcom plans to fund the planned network itself but it is believed the partner companies would take a shareholding in an operating company.

Asia Netcom first announced its EAC Pacific loop, consisting of a northern route connecting Japan to the US, and a southern route linking the Philippines to the US via Guam and Hawaii, in January this year. In June Barney raised concerns about the large number of similar planned projects – as many as eight at one time – but he says now only three are likely to proceed.

“Trans Pacific Express will probably get built, Asia America Gateway will probably get built, we just don’t know when, and then there is a third cable that will come out of Japan, which we will be involved with,” Barney said. He said EAC would likely be renamed once partnership arrangements are in place.Google has been actively canvassing Asia Pacific carriers, including Telstra and Flag Telecom to garner interest its so-called Unity Pacific cable proposal. Last week Telstra confirmed that it had rebuffed the offer. Barney said Asia Netcom has met with Google and suggested it could find common interest in EAC.“

Between us, Google, NTT, KDDI, SingTel – those five guys all have huge interests between Asia and the US, and none of us are involved in AAG,” Barney said. AAG partners include PLDT, Reach, StarHub and Telekom Malaysia.

According to Barney, “we’re trying to see what partners will go with us from the beginning. The problem right now is that the business case for a standalone, straight-shut cable doesn’t make any sense unless you pull along with three or four of the other guys that are going to be chewing it up.”

He added, “Google is a customer of ours and we’re talking to everyone... We have had multi-party discussions on a lot of fronts with a lot of people involved. Within the next 30 days we should be able to nail down where we stand.”Barney predicts increasing involvement by content players in the capacity market and expects bandwidth providers to soon be offering specialised wholesale arrangements combining capacity and hosting to meet their needs. Asia Netcom is expected to launch such offers next year.

GOOGLE CABLE KICKS OFF A TREND: Barney said, “this part of the market will be as big as the carriers within five years. These new content delivery giants, they are actually becoming carriers in their own right but also systems integrators and applications providers… they are not going to settle for an enterprise price point and solution but they are also not big enough to get a carrier-grade circuit as well. They are in the middle. They won’t buy from multiple players like a carrier and build their own diverse network.”

He added, “I think all these guys that play in this space are trying to look out ten years and see what they need to control to be able to sustain growth and profitability. This is one of the bottlenecks.” 

 by Tim Marshall

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