Subsea internet cable rivalry between US and China

China’s state-owned telecommunications companies are developing a $500 million undersea fiber optic internet cable network that will link Asia, the Middle East and Europe to compete with a similar project led by the United States backing, the four people involved in the deal told reporters. The plan is a sign that an escalating technology war between Beijing and Washington threatens to tear apart the fabric of the Internet.

China’s three major carriers – China Telecom Corporation (China Telecom), China Mobile Limited and China United Network Communications Group Co Ltd (China Unicom) – are mapping  one of the largest and most advanced networks in the world, according to  four people with direct knowledge of the plan.

Called EMA (Europe-Middle East-Asia), the proposed cable would link Hong Kong with the Chinese island province of Hainan, before meandering to Singapore, Pakistan, Saudi Arabia, Egypt and France. , Four people said. They asked not to be named because they were not authorized to discuss possible trade secrets.  The cable, which costs around $500 million, will be manufactured and installed by Chinese company HMN Technologies Co Ltd, a fast-growing cable company whose majority-owned predecessor to the telecom giant China Huawei Technologies Co Ltd, the people said.

They said HMN Tech, majority owned by Shanghai-listed Hengtong Optic-Electric Co Ltd, will receive a Chinese state subsidy to build the cable line.

China Mobile, China Telecom, China Unicom, HMN Tech and Hengtong did not respond to requests for comment.

China’s foreign ministry said in a statement to Reuters that it “always encourages Chinese companies to invest and cooperate with foreign countries” without directly commenting on the EMA cable project.

News of the planned cable route follows report last month, revealing how the US government, concerned about Beijing’s eavesdropping on internet data, has successfully thwarted several undersea fiber optic cable projects. Of China abroad in the past four years. Washington has also blocked permits for planned private undersea cables that would link the United States with the Chinese territory of Hong Kong, including projects by Google LLC, Meta Platforms, Inc and Amazon.com Inc.

Undersea fiber optic cables carry more than 95% of international internet traffic. These high-speed links have been owned for decades by groups of telecommunications and technology companies, who pooled their resources to build these vast networks so that data can travel seamlessly around the world.

But these cables, vulnerable to espionage and sabotage, have become weapons of influence in the growing competition between the United States and China. Superpowers are battling to dominate the cutting-edge technologies that could define economic and military supremacy in the decades to come. The China-led EMA project aims to compete directly with another cable line being built by US-based SubCom LLC, called SeaMeWe-6 (Southeast Asia-Mid East-Western Europe-6) ), which will also link Singapore with France, via Pakistan, Saudi Arabia, Egypt and half a dozen other countries along the route.

SeaMeWe-6 Cable Corporation – which originally included China Mobile, China Telecom, China Unicom and telecom operators from several other countries – initially chose HMN Tech to build the cable. But a successful US government pressure campaign cancelled the contract with SubCom last year, Reuters reported in March.

The US flash attack included awarding millions of dollars in training grants to foreign telecommunications companies in exchange for them choosing SubCom over HMN Tech. The US Department of Commerce also imposed sanctions on HMN Tech in December 2021, accusing it of intending to buy US technology to help modernize the Chinese People’s Liberation Army. Country. The move undermines the project’s viability by preventing owners of cables built by HMN from selling bandwidth to US tech companies, often their biggest customers.

China Telecom and China Mobile pulled out of the project after SubCom won the contract last year and together with China Unicom began planning the EMA cable, the four people involved said. Sources say China’s three state-owned telecom companies are expected to own more than half of the new network, but they are also working on deals with foreign partners.

Chinese carriers have signed separate memorandums of understanding with four telecom operators this year, sources said: France Orange SA, Pakistan Telecom (PTCL), Telecom Egypt and Zain Saudi Arabia, a unit of Kuwait’s Mobile Company.

Chinese companies have also held talks with Singapore Telecommunications Limited, a state-controlled company commonly known as Singtel, while other countries in Asia, Africa and the Middle East are also being discussed. Approached to join the consortium, the people involved said.

Orange declined to comment. Singtel, PTCL, Telecom Egypt and Zain did not respond to requests for comment.

American cable company SubCom declined to comment on rival cables. The Justice Department, which oversees an interagency task force responsible for protecting US telecommunications networks from espionage and cyberattacks, declined to comment on the EMA cable.

A State Department spokesperson said the United States supports a free, open, and secure Internet. The government said countries should prioritize security and privacy by “completely excluding untrusted providers” from wireless networks, terrestrial and underground cables, satellites, cloud services cloud and data centre without mentioning HMN Tech or China. The State Department did not respond to questions about whether it would launch a campaign to convince foreign telecommunications companies not to participate in the EMA cable project.

China’s Foreign Ministry said in its statement that it opposed the “violation of established international rules” by the United States regarding cooperation on submarine cables.

“The US should stop producing and spreading rumours about so-called ‘data surveillance activities’ and stop slandering and slandering Chinese companies,” the statement read.

Large submarine cable projects typically take at least three years to go from design to handover. The Chinese companies hope to finalize the contracts by the end of this year and bring the EMA cable online by the end of 2025, the people involved said. One of the participants in the deal told Reuters that the cable would bring China strategic benefits in its war with the United States.

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