According to the Financial Times, China Telecom and China Unicom have decided to withdraw from the SEA-ME-WE 6 submarine internet cable project, which is intended to connect Southeast Asia to Europe. The move could lead to higher interconnection costs for data center operators operating in the respective regions. Work on the $500 million SEA-ME-WE 6 (Southeast Asia-Middle East-Western Europe) cable system began in early 2022.
The cable will stretch from Singapore to France, with a total length of about 19,200 km. The total capacity is planned to be 120 Tbps. The line is planned to be put into operation in the first quarter of 2025. However, it is now clear that China Telecom and China Unicom have withdrawn their stakes of 20% each in the project due to US sanctions, which jeopardizes its implementation. The reason for this decision is that the contract for laying the cables was awarded to the American company SubCom, and not to the Chinese Hengtong, which also competed.
Hengtong is partly linked to Huawei, which was forced to divest some of its business due to US sanctions. In addition, SubCom has already been selected as the contractor to replace Huawei in another project in the same region. Finally, the Pacific Light Cable Network (PLCN), the cable system connecting the US and Southeast Asia, lost a segment under US pressure. The connection of one of the project participants with Huawei and the Chinese authorities was again cited as the reason. Again, SubCom was responsible for laying the cable.
According to experts, the withdrawal of Chinese operators from the SEA-ME-WE 6 initiative could worsen already strained relations between China and the US. In addition, the development of global network infrastructure may be delayed, which will affect companies worldwide. It should be noted that the US Federal Communications Commission (FCC) revoked China Telecom’s license to provide services to the US market as early as 2021. In early 2022, the US subsidiary of China Unicom, the state-owned Chinese telecommunications operator, was banned from doing business in the US.
