Facebook buys a stake in $450M Asian undersea cable consortium

The Asia Pacific Gateway will link Malaysia, South Korea and Japan with China, Hong Kong, Taiwan, Singapore and Vietnam

Facebook has taken a stake in a US$450 million project to link South Asian countries with an undersea cable, a company spokeswoman said Friday. The project is expected to be ready some time in 2014.

"We're making this investment to support our growth in South Asia and to better serve our users in that region," said Facebook spokeswoman Charlene Chian.

The Asia Pacific Gateway will run from Malaysia to South Korea and Japan, with branches to mainland China, Hong Kong, Singapore, Taiwan and Vietnam, according to a July 3 filing to Malaysian stock market regulators by Time Dotcom (TdC), another of the partners in the consortium behind the project.

The cable will have a total design capacity of 54.8 terabits per second using 40Gbps channels, but it will be possible to upgrade it to 100Gbps per channel when the technology becomes available, TdC said in the filing.

Facebook's Chian said: "The entire project is expected to cost approximately $450 million, and each of the 12 members of the consortium will have a percentage ownership of the asset proportionate to its investment in the project. We are not disclosing any specifics on our investment."

The other partners in the consortium, according to TdC, are China Mobile, China Telecom, China Unicom; Taiwan's Chunghwa Telecom; Korean network operators KT and LG Uplus; NTT Communications of Japan; StarHub of Singapore; Viettel Group and the Vietnam Posts and Telecommunications Group.

TdC put its share of the bandwidth at 3.4Tbps, for a total investment of $45 million -- although that figure includes the cost of the Malaysian landing station, it said.

NEC will build the cable. It will start work by the end of this year, TdC said, adding that the project should be complete some time in 2014.

TdC hopes the cable will reduce its dependency on Singapore as a transit route for international telecommunications traffic, while Facebook sees it as a way to support its growth in South Asia.

Plans for the Asia Pacific Gateway have been under way since 2009, but even as recently as this January Facebook's name didn't figure among the list of potential investors.

The social network has recently upped its investments in new businesses and markets, as growth in user numbers in its traditional markets slows.

The cable will "[make] it possible for us to provide a better user experience for a greater number of Facebook users in countries like India, Indonesia, Malaysia, the Philippines, Hong Kong, and Singapore," said Chian.

The cable's link with the Philippines may be in doubt: Philippine Long Distance Telephone Co. (PLDT) was an early member of the consortium but has not discussed the project recently. The company did not figure among TdC's list of investors in the project, and the Philippines was not on the list of landing sites for the cable. PLDT did not immediately respond to a request for comment.

Michael Kan, in Beijing, contributed to this report.

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