A submarine in close quarters with an undersea fiber-optic communications cable. Photo: Policy Exchange

With partnership negotiations in their final stages, Indonesia will be a major beneficiary of the world’s longest fiber-optic telecommunications cable linking peninsular Southeast Asia directly to the United States mainland.

The 16,000-kilometer cable, seen increasingly as a US-backed digital development counter to China’s worldwide Belt and Road Initiative (BRI), is expected to be completed within the next three years.

The Internet-enabling cable will be launched from Singapore, cross the Java Sea and then curve northwards through the Banda Sea east of the island of Sulawesi and on through Micronesia before embarking on the long haul across the Pacific Ocean.

Nevada-based developer Trans Pacific Networks (TPN) has secured important support from the US International Development Finance Corporation (IDFC), formed last December to compete against China’s ambitious BRI program.

An amalgamation of the Overseas Private Investment Corp (OPIC) and the Development Credit Authority, an arm of the US Agency for International Development (USAID), IDFC sees the project as a future driver of economic development.

“It is a critical element of the Indo-Pacific’s digital infrastructure, ultimately strengthening networks and increasing capacity while reducing internet costs,” OPIC’s then acting president and chief executive, David Bohigian, told the 2019 Indo-Pacific Business Forum in Bangkok last November.

When IDFC chief executive Adam Boehler met Indonesian President Joko Widodo during a visit to Jakarta last month, he pledged US$5 billion in development funds, seeking to match Chinese commitments and a whopping $23 billion in business deals Indonesia had concluded with the United Arab Emirates only days earlier.

IDFC chief executive Adam Boehler and Indonesian President Joko Widodo before a meeting last month in Jakarta. Photo: Twitter

This week in Washington Maritime Affairs and Investment Coordinating Minister Luhut Panjaitan had his second meeting in three months with Jared Kushner, President Donald Trump’s son-in-law and close adviser, to discuss closer collaboration on infrastructure projects in Indonesia.

The TPN cable will eventually make landfall near the northern California port town of Eureka, 360 kilometers south of Pacific City, Oregon, the arrival point for a second newly laid 13,600-kilometer high-capacity cable linking the US to China, South Korea, Japan and Taiwan.

A 300-kilometer branch of the new Southeast Asia cable will come ashore near the Java coastal settlement of Tanjung Pakis, 50 kilometers northeast of Jakarta, where it will plug into the network of the Indonesian mobile telecom operator that gets the nod as the project’s local partner.

Sources familiar with the project said that the choice of a local telecom operator choice and those of the anchor clients, expected to be US tech giants with a global reach, will be announced at the end of March.

The new cable will be the second fiber-optic connection between Southeast Asia and the US. An international consortium only recently commissioned an undersea cable, known as SEA-US, linking the North Sulawesi city of Monado to Davao in the Philippines, Guam, Hawaii and Los Angeles.

The seven partners for that $250 million venture include Indonesia’s Telekom International (Telin), an arm of the country’s largest service provider, Globe Telecom in the Philippines, US-based RAM Telecom International (RTI), Telkom USA and GTA Teleguam.

In an unprecedented move, the US Justice Department recently blocked a US-Hong Kong undersea cable, backed by Google and Facebook, because of Chinese partner Dr Peng Telecom & Media Group Co’s close government connections and Hong Kong’s declining autonomy from Beijing.

A computer network cable above a Chinese flag in this July 12, 2017 illustration. Photo: Twitter

Much of the $300 million Pacific Light Cable Network between the Chinese territory and Los Angeles, which would have provided greater bandwidth to a major regional Internet hub, had already been laid under a temporary permit which expired last September.

It is the first time the US has denied an undersea cable license based on security issues, forcing the two tech giants to look elsewhere for a global data center and raising concerns of future disruptions to other technology projects as US-China relations go through stormy times.

On its passage to Hong Kong, the 12,900-kilometer cable touches base at Toucheng, an urban township on the northern tip of Taiwan, and through an extension makes landfall at Baler on the east coast of the main Philippine island of Luzon, 240 kilometers northeast of Manila.

China’s largest private broadband provider, Dr Peng’s partners include Huawei Technologies Co, the telecommunications company that was hit by US sanctions last year over allegations that the equipment it uses could become a tool for espionage.

Marking a further escalation in tensions, the US Justice Department on February 13 charged Huawei, four of its subsidiaries and chief financial officer Meng Wanzhou with racketeering and stealing state secrets.

Completed in 2018 by a consortium comprising China Mobile, China Telecom, China Unicom, Chunghwa Telecom, Korea Telecom, Microsoft and Japan’s Softbank Telecom, the North Asia trans-Pacific cable appears to have been lucky to escape scrutiny.

From the landing station in Pacific City, a sleepy beachside town, the new connection is linked to provider Wave Broadband’s data center ring in Hillsboro, Oregon, and then into the company’s 1,200-kilometer network extending along the US West Coast.

Stock image of an underwater fiber-optic cable on a sandy shore. Photo: iStock

Despite the cost and difficulty of laying cables, they are cheaper and more efficient than satellites; in fact, 99% of data already travels between countries and continents through nearly 400 undersea linkages, about a quarter of which have been added in the last four years.

Cable-laying comes in cycles, in tandem with advances in technology that bring massive increases in capacity. One such cycle was in the early 2000s at the time of the historic dot com bubble. The last was in 2007-2008, before the economic crisis brought cable projects to an abrupt halt.

Telkom Malaysia, Mora Telematika and Indonesia’s XL Axiata are already operating a high bandwidth 400-kilometer undersea cable from Malacca to the South Sumatra city of Dumai and then on to Batam, an Indonesian island south of Singapore that has become a center for shipbuilding and electronics manufacturing.

In addition, an XL landing station at Anyer, west of Jakarta, is a stopover point for the Sydney-based Vocus Group’s ASC cable between Singapore and Australia which went in to operation in October 2018, boosting up to six times the capacity of Indonesia’s international network.

Indonesia’s second largest telecom operator, XL has been busy expanding its fiber-optic network across Central and West Java to support an anticipated surge in consumer demand in two of Indonesia’s most populous provinces and also to prepare for an eventual transition from 4G to 5G services.

Tech giant Google has partnered with Indosat, Telstra, Singtel, AARnet and SubPartners in the so-called Indigo venture, the cable connecting Singapore to Indonesia and the Australian cities of Perth and Sydney, both linked in a loop across the Great Australian Bight.

Early last year, Google announced it will open a cloud computing region in Indonesia in mid-2020, providing benefits for local start-ups and enterprises like Go-Jek and Tokopedia with low latency and high performance cloud-based data and workload.

A Google office building with clouds in the background. Photo: Facebook

Six months later, fierce competitor Amazon unveiled plans to launch its own cloud region, comprising three Jakarta-based data centers which will be operational by either late 2021 or early 2022. Total investment is expected to eventually reach about $1 billion.

Market research firm Canalys shows Amazon holding the highest market share of worldwide public cloud providers with 32.2%, followed by Microsoft Azure (16.5%) and Google Cloud (9.5%).

Cloud regions, or data centers, allow providers to locate their cloud resources closer to their customers, both internal and external. The lower the latency, the less the lag time. That, say experts, is a major benefit for Indonesia’s 44 million gamers in particular.

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