Huawei's Ace In the Hole: Undersea Cables

While the United States is banning the use of Huawei equipment from its fifth-generation infrastructure, the Chinese telecommunications company is working to expand its share in the undersea cable market, which is dominated by the U.S., Europe and Japan. Nikkei Asian Review reports: About a decade ago, Huawei entered the business by setting up a joint venture with British company Global Marine Systems. It expanded its presence by laying short links in regions like Southeast Asia and the Russian Far East. But last September, Huawei surprised industry executives in Japan, the U.S. and Europe by completing a 6,000 km trans-Atlantic cable linking Brazil with Cameroon. This showed Huawei has acquired advanced capabilities, even though it is still far behind the established players in terms of experience and cable volume.

During the 2015-2020 period, Huawei is expected to complete 20 new cables -- mostly short ones of less than 1,000 km. Even when these are finished, Huawei's market share will be less than 10%. Over the long term, however, the company could emerge as a player to be reckoned with. Huawei is estimated to be involved in around 30 undersea cable projects at the moment. It also reportedly has a hand in about 60 projects to enhance cable landing stations to boost transmission capacity. The reality is, even if the U.S. succeeds in shutting out Huawei from 5G networks in major countries, the Chinese company could still thwart American efforts to maintain leadership in handling global data traffic. The report goes on to say that the U.S., Japan and Australia are working to address this potential threat. 'Steps they are considering include banning Huawei from laying cables connected to one of the three countries, and urging other governments to prevent the company from getting involved in the construction of any major cables Informed sources.'

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