According to an article by Capacity this morning, Hibernia Atlantic has now halted all work on its Hibernia Express transatlantic cable project due to the uncertainty around its vendor Huawei’s status in the US market. It had been so long since we’d seen an update on the project that I suspected something of this sort was in the works.
Huawei has been under fire in the USA in regards to possible security risks that might derive from its relationships with the Chinese military. Just which equipment would have how much risk is unclear, but in this case we’re not even talking about something relatively intelligent at layer 3 but rather layer 1 and layer 2 at most. But the discussion isn’t really a discussion, it’s just political posturing. Frankly I think it’s a bit silly to think that Huawei and its owners (think powerful Chinese politicians and military figures) would be dumb enough to risk their own fortunes by booby-trapping their own golden goose’s gear for a one-shot chance at intercepting what would be mostly mindless tweets and porn anyway. But Huawei is in the crosshairs and not much else matters I guess.
Hibernia is now looking at the possibility of replacing Huawei with another vendor, with Alcatel-Lucent and TE Subcom already looking at it. If they do switch, it would still push the system’s operational date back at least until the end of 2014. When completed the cable is expected to take NYC-London latency down a significant notch and therefore cater to the financial community in particular.
But Huawei wasn’t just the vendor, they were helping with the financing for the $300M project too. So Hibernia has to round up some funding in addition to re-designing the system for different gear. But if they’re going to make the switch, I expect they will make both moves very quickly.
The folks at Emerald Networks are probably happy about this turn of events, as their proposed cable between Long Island and Ireland with branches to Iceland and Greenland is currently targeted for mid-2014. If they make that date, they’re now at the head of the line to be the first new transatlantic cable to come ashore in the last decade.
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Categories: Telecom Equipment · Undersea cables
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No surprises there, the lack of any press or marketing effort over the last 12-18 months has been very telling.
Also, the rumours that hardly anyone was willing to pay the huge NRC and MRC they were after must also be a factor, but I guess it’s more straightforward to blame Huawei 🙂
Express was already funded by early commitments from customers. This delay doesn’t really benefit Emerald because it is not the lowest latency path, the customer base is different.
Obviously we won’t get these answers but I’d question whether it was fully funded or just part funded by these commitments, and also whether they are full commitments or not… Reason being very very few firms actually need to be the lowest on a transatlantic path, and even if they do, they don’t need to be the lowest at a huge cost especially given how low equities volumes are right now.
Add in the uncertainty that’s fuelled by competing systems such as the Perseus QuanTA network that gets pretty close to Project Express numbers in some circumstances, and also Emerald, AC-1 improvements etc, and I can’t see many customers making full commitments until it’s built, tested, and can be compared to the others as well, and even then subject to trading volumes/requirements at the time…