Asia Global Crossing's undersea cable to quadruple speed of Net connections

Asia Global Crossing Inc landed the first foreign submarine cable in Taiwan yesterday, enabling the nation to quadruple its high-speed international Web and telecom connectivity via the fiber optical network.

Speaking at the landing ceremony yesterday, Kao Kai-Sheng (高凱聲), deputy director of the Directorate General of Telecommunications, said Taiwan's international capacity at the end of this year will reach 210 Gpbs, of which Asia Global Crossing will provide almost 30 percent. Kao also announced that the company will receive its operational license next week.

Taiwan is Asia Global Crossing's third landing location in Asia, following Japan and Hong Kong.

"Taiwan not only connects with Japan, Hong Kong and South Korea, but also with Singapore, Malaysia and the Philippines, positioning Taiwan as Asia's telecommunication hub," said John Legere, president and chief executive officer of Asia Global Crossing.

The firm will provide transmission capacity to businesses through local fixed line networks. Those four companies -- Chunghwa Telecom Co (中華電信), Sparq (速博電信), Taiwan Fixed Network Corp (台灣固網) and Eastern Broadband Telecommunications Co Ltd (東森寬頻) -- are all potential customers, said Chian Feng (錢鋒), general manager of Asia Global Crossing Taiwan.

Feng said it is hoped that talks with the four will be finalized in August, but declined to discuss who might be the potential partners.

Prior to Asia Global Crossing's landing in Taiwan, Chunghwa monopolized the international data transmission market. Asked about concerns over competing with Chunghwa, Feng said the relationship is one of both competition and cooperation, as they dependent on Chunghwa for local and outbound transmission backup services.

One pundit said cheaper prices are on the way.

"Asia Global Crossing's [market entry] will definitely foster competition and pull prices down for new fixed-line entrants used to [Chunghwa's] prices, said Alex Wu (吳興國) a telecom industry analyst with China Securities Co Ltd (中信証券).

However according to Wu, while the impact may not be dramatic at first, as subscriber numbers grow, prices will fall.

"According to foreign telecom experience, when a market is liberated, prices drop significantly."

The submarine cable came ashore in Taipei county's Pali (八里) and will from there be connected to the companies distribution center in Neihu (內湖).

Asia Global Crossing depends on local fixed-line providers to link between the ocean cable and the center, from where cables fan out to business clients.

Hong Kong-based Asia Global Crossing's largest shareholders include US-based Global Crossing and Microsoft, and Japan's Softbank.

Global Crossing Taiwan is a 60/40 joint venture between Asia Global Crossing and Taiwan's Microelectronics Technology Inc (台揚科技), respectively.

It's also the first telecom company to be granted an international submarine cable license after the Ministry of Transportation and Communications opened the market to foreign firm's last year.