New Telekom, NTT cable to boost internet traffic

Malaysia's Telekom and Japan's NTT Communications will invest in a sixth undersea cable worth USD 500 million to expand the internet traffic capacity between Southeast Asia and Japan, a source with direct knowledge of the matter said.

The new terabit cable, which was originally named the Asia Submarine Express, will be about 8,000 kilometres long, the source said.

The cable is expected to branch out into Singapore, the Philippines and Hong Kong, improving internet connectivity between Southeast Asia and Japan, which is an important transit point for connection to Europe and North America.

Singapore communications firm StarHub, which runs wireless broadband and television operations, will be one of the key companies that will subscribe to the cable, the source said.

Telekom will also benefit from improved connectivity as it is in the midst of rolling out its high speed broadband network, which offers its subscribers up to a 20 megabit connection.

The cable is expected to be formally launched in Kuala Lumpur later on Monday.

The source said that the cable will run parallel to the proposed SJC cable system mooted by a consortium including the likes of internet giant Google, Singapore Telecommunications and India's Bharti Airtel.

"The cable has been contracted out to Japan's NEC Corp and the value of the contract is about USD 350 million," the source said.

Telekom's shares were unchanged at 3.70 Malaysian ringgit per share as of 0405 GMT.