Consortium Inks MOU for New Cross Pacific (NCP) Cable System

According to Korea Times and press release from KT, KT has allied with six parties to sign the Memorandum of Understanding for the construction of the New Cross Pacific (NCP) Cable System. The consortium consists of Chunghwa Telecom, KT Corporation, China Telecom, China Mobile, China Unicom and a US-based company. 

The NCP cable system shall be built as a high capacity fibre-optic submarine cable system across the Pacific Ocean directly connecting the US and Asia, with 6 cable landing stations, two in China and one in each of Korea, Taiwan, Japan and the US. The NCP will be designed to interconnect with other cable systems such as TPE, and APG in the region to maximize the throughput of data and the resilience of the trans-Pacific transmission infrastructure.

As the development of domestic broadband strategy, both Korea and China are keen on the construction of new submarine cables across the Pacific Ocean.

According to Akamai's State of Internet, Korea leads far ahead worldwide on the average broadband speed. As a result, Korean carriers need huge international capacity to maintain or improve their market positions. So far, there is only one direct cable route between Korea and the US, the TPE cable which has one fiber pair linking Koeje CLS in Korea and Hillsboro CLS in the US. All the alternative solutions have to go through a cable station in Japan, rising concerns on internet security and serious outages. Korea is keen on new cable routes to the US to improve the resilience of its broadband internet. On the other hand, most of the international submarine cables landing in Korea are controlled by KT. Especially on the trans-pacific route, other Korean carriers such as SK and LG Uplus are difficult to get capacity from KT or have to pay expensive cost for that. SK and LG Uplus are struggling for seats in international submarine cable consortia.

As for China, new cross pacific cables are even more expected. Even without the recently released Broadband China Strategy, Chinese carriers need huge trans-pacific capacity. In each of the next 3-5 years, China Telecom, China Unicom and China Mobile shall add approximately 1 Tbps or even more of trans-pacific capacity. Especially for China Mobile, strong in the mobile business and free cash flow, short in the international capacity and broadband internet, China Moble has been trying to invest in any new submarine cable landing China such as APG, SJC, TSE-1, Kinmen-Xiamen Cable and NCP

In the US end, although the Tier 1 carriers like AT&T, Verizon don't have much interest to invest in new trans-pacific cables, there won't be lack of new comers anytime in the continent. Google contributes the US landing for Unity, Facebook takes a seat in the APG consortium. Although it was not announced in the press release the US party of the NCP cable consortium, Facebook or Google is most likely to contribute the NCP's US landing. 

The NCP cable syatem is expected to maximize the throughput of data and the resilience of the Trans-Pacific transmission infrastructure.

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