Geopolitical tensions arise in Asia over subsea fiber optic cable projects; U.S. intervened to flip SeaMeWe-6 contractor

Multimillion-dollar undersea/subsea fiber optic cable projects have become the latest focal point of geopolitical tensions in Asia as China intensifies its highly contested claims over the South China Sea, writes Nikkei Asia’s Singapore correspondent Tsubasa Suruga.  These cables are crucial for keeping information flowing throughout the region and across the Pacific. Most countries require builders to get approval if they plan to lay cables in their territorial waters, but not in their exclusive economic zones, which extend 200 nautical miles out from a country’s coast.

China, however, insists that projects within its self-proclaimed “nine-dash line” — an area encompassing virtually the entire South China Sea — need Beijing’s approval. A nonobjection letter must be obtained from China’s People’s Liberation Army before the formal application process can even begin. Beijing imposes the policy even though an international tribunal found in 2016 that the nine-dash line lacked a legal basis.

“It is no secret the whole industry is more confronted by politics,” said Takahisa Ohta, senior director of the submarine network division at NEC, one of the world’s top three suppliers of subsea cables. Some of the companies involved, like Singtel, are looking for ways to diversify their routes.

Tay Yang Hwee, a 30-year industry veteran who heads subsea cable development at the Singaporean telecom provider, said it is “exploring alternate paths” for connecting data hubs, but he admits it is “very difficult” to avoid the South China Sea as a whole.

In February, American subsea cable company SubCom LLC began laying a $600-million cable to transport data from Asia to Europe, via Africa and the Middle East, at super-fast speeds over 12,000 miles of fiber running along the seafloor.
That cable is known as South East Asia–Middle East–Western Europe 6, or SeaMeWe-6. It will connect a dozen countries as it snakes its way from Singapore to France, crossing three seas and the Indian Ocean on the way. It is slated to be finished in 2025.  The client for the cable was a consortium of more than a dozen global firms. Three of China’s state-owned carriers – China Telecommunications Corporation (China Telecom), China Mobile Limited and China United Network Communications Group Co Ltd (China Unicom) – had committed funding as members of the consortium, which also included U.S.-based Microsoft Corp and French telecom firm Orange SA, according to six people involved in the deal.
HMN Tech, whose predecessor company was majority-owned by Chinese telecom giant Huawei Technologies Co Ltd,  was selected in early 2020 to manufacture and lay the cable, the people said, due in part to hefty subsidies from Beijing that lowered the cost. HMN Tech’s bid of $500 million was roughly a third cheaper than the initial proposal submitted to the cable consortium by New Jersey-based SubCom, the people said.

The Singapore-to-France cable would have been HMN Tech’s biggest such project to date, cementing it as the world’s fastest-rising subsea cable builder, and extending the global reach of the three Chinese telecom firms that had intended to invest in it.

But the U.S. government, concerned about the potential for Chinese spying on these sensitive communications cables, ran a successful campaign to flip the contract to SubCom through incentives and pressure on consortium members.  It’s one of at least six private undersea cable deals in the Asia-Pacific region over the past four years where the U.S. government either intervened to keep HMN Tech from winning that business, or forced the rerouting or abandonment of cables that would have directly linked U.S. and Chinese territories.

SubCom had no comment on the SeaMeWe-6 battle, and HMN Tech did not respond to requests for comment. In a statement last year about infrastructure projects, the White House briefly noted that the U.S. government helped SubCom to win the Singapore-to-France cable contract, without giving details. China’s foreign ministry did not respond to requests for comment. China Telecom, China Mobile, China Unicom and Orange did not respond to requests for comment. Microsoft declined to comment.

Undersea cables are central to U.S.-China technology competition.  Across the globe, there are more than 400 cables running along the seafloor, carrying over 95% of all international internet traffic, according to TeleGeography, a Washington-based telecommunications research firm. These data conduits, which transmit everything from emails and banking transactions to military secrets, are vulnerable to sabotage attacks and espionage, a U.S. government official and two security analysts told Reuters.

The potential for undersea cables to be drawn into a conflict between China and self-ruled Taiwan was thrown into sharp relief last month. Two communications cables were cut that connected Taiwan with its Matsu islands, which sit close to the Chinese coast. The islands’ 14,000 residents were disconnected from the internet.

Taiwanese authorities said they suspected a Chinese fishing vessel and a Chinese freighter caused the disruption. However, they stopped short of calling it a deliberate act and said there was no direct evidence showing the Chinese ships were to blame. China, which considers Taiwan a breakaway province, has ratcheted up military and political efforts to force the island to accept its dominion.


One thought on “Geopolitical tensions arise in Asia over subsea fiber optic cable projects; U.S. intervened to flip SeaMeWe-6 contractor

  1. Time for the Quad to Talk About Subsea Cable Security

    Subsea cables are responsible for around 97 per cent of the data and information flows that result in trans-continental communication. The UN General Assembly has described cables as “critical communications infrastructure”. The United Nations Convention on the Law of the Sea (UNCLOS) also describes intentional damage to the subsea cables as a punishable offence. But neither carry an accountability mechanism.

    Cutting off the subsea cables to disable communication for an opponent country or committing espionage activities by tapping the wires on the bottom of the ocean traces its history back to the First World War. In February this year Chinese vessels cut the Matsu Island internet cables which forced Taiwan’s peripheral island into anxious isolation for about six weeks. With the rise of China’s Huawei Marine Networks in the subsea cables industry, worries increase manifold about Chinese espionage activities in the already strengthening information war.

    But while China is a quest to dominate information, it will have to surpass the already existing strong subsea cables architecture that the Quad partners have built. Together, the Quad partners comprise the largest stakeholders in the subsea cable ecosystem. Companies such as SubCom LLC in the United States and Japan’s NEC are the top two subsea cable manufacturers, while the strategic location of Australia and India in the Pacific and Indian oceans respectively make them a routing priority for a consortium of subsea telecom operators and network service providers.

    With increasing digital demands expected for countries in the Indo-Pacific into the future, the challenges associated with laying and maintaining subsea cables will only become more common.

    The Quad has an onus of protection for this crucial infrastructure. And the ICPC offers the Quad the best platform to interact with stakeholders in the subsea cable ecosystem, including manufacturers, layers, maintainers, network operators as well as major cloud service providers.

    The Quad countries can talk “security” in the ICPC by looking for opportunities to enhance if not enforce accountability mechanisms in case of intentional damage to subsea cables. India has particular need to encourage the security dimension, given its rising status. The Australian government’s Department of Home Affairs is already a member of the ICPC and other Quad partners members should also ensure relevant government bodies are involved to signal the seriousness of the security needs for subsea cables.

    The world will increasingly struggle to balance open standards for data sharing in support of democratic systems with the rise of extravagant claims to digital sovereignty that underpin techno-authoritarianism. And the potential battleground is not only on screens but in the infrastructure that lies deep in the ocean.

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