Construction and Maintenance Agreement
|
Conclusion of China-U.S. Cable Network Construction and Maintenance Agreement |
| Notification | December 12, 1997 |
The China-U.S. Cable Network is an optical submarine cable system that, when completed, will connect China, the United States, Japan, Korea, and Taiwan in a loop over a total distance of some 30,000 km. The cable system is slated to begin operation by the end of 1999. Total construction cost is expected to reach US$1.1 billion (approximately 136.8 billion yen). By improving existing WDM (wavelength-division mulitiplexing) technology, the cable network will have a total capacity of 80 Gpbs (equivalent to 967,680 telephone lines). In Japan, the cable will be landed in Chiba and Okinawa Prefectures.
KDD will land China-U.S. cable at Chikura Cable Landing Station in Chikura, Chiba Prefecture. KDD plans to connect the China-U.S. Cable Network to KDD's other international optical submarine cables such as the TPC-5 cable network and the SEA-ME-WE 3 cable via the JIH cable system. The JIH cable is a high-capacity optical submarine cable that will surround the Japanese archipelago in a loop when it is put into service (slated for March 1999).
KDD will invest US$62 million (approximately 7,700 million) in return for approximately 2.2 Gpbs (equivalent to 26,460 telephone lines) in the China-U.S. Cable Network to meet the soaring demand for multimedia-related uses such as the Internet.
The supply agreement for the China-U.S. Cable Network was signed on December 11. Under the agreement, KDD-SCS(main office: Tokyo, president: Yasuhiko Niiro), a wholly-owned subsidiary of KDD, and NEC Corporation (main office: Tokyo, president: Hisashi Kaneko) received a construction order from the consortium of fourteen carriers that have concluded the construction and maintenance agreement. The order, valued at approximately US$500 million (approximately 62,200 million yen), will call for the companies to construct the north side and west side segments (Shantou - Fangshang - Chongming - Pusan - Chikura - Bandon), or 15,000 km of the cable network.
Due to the rapid increase in communications traffic in the Pacific region, the demand for high-quality and economical communications network has soared. To meet this demand, telecommunications carriers in the region signed a memorandum on the construction of the China-U.S. Cable Network on March 31 this year, which led to the signing of this construction and maintenance agreement.
[Reference] Overview of the China-U.S. Cable Network
1. Service to begin: end of 1999
2. Capacity: 80 Gpbs (equivalent to 967,680 telephone lines)
3. Total length: approximately 30,000 km
4. Connected countries/landing points:
5. Total construction cost:
US$1.1 billion (approximately 136.8 billion yen)
6. The initial parties:
14 telecommunications carriers from 9 countries and regions
Japan: KDD and NTT Worldwide Network United States: AT&T, MCI Communications, Sprint, and Teleglobe USA, and SBC Communications China: China Telecom Hong Kong: HongKong Telecom Taiwan: Chunghwa Telecom Korea: Korea Telecom Singapore: Singapore Telecom Malaysia: Telekom Malaysia Australia: Telstra
Note: Besides the carriers above, 36 carriers will participate in the cable network as equity holders.
7. Course of events and schedule:
March 31, 1997 Memorandum on construction is signed. December 11, 1997 Agreement on construction and maintenance and supply agreement to be signed. End of 1999 Service due to begin.