An ultrafast Internet cable will be laid between Los Angeles and Hong Kong by a Chinese company in partnership with Facebook Inc. and Google owner Alphabet Inc., The Wall Street Journal reported.
TE Subcom, the U.S. subsidiary of TE Connectivity Ltd., a Swiss technology supplier under contract to build the link, said that a new fiber-optic technology will be used on the 12,800-kilometer Pacific Light Cable Network to support the highest-capacity route.
TE said that the system is expected to be launched in 2018.
Pacific Light Data Communication Co., a new Hong Kong company, will finance the project, together with the two U.S. tech giants as co-investors. The financial terms of the project were not disclosed.
"It is certainly gratifying that global technology companies like Google and Facebook have become co-investors" in the project, Wei Junkang, chairman of Pacific Light, said in a statement.
The report said that Pacific Light Data has no experience building networks, being newcomer in the industry. The company filings said that earlier this year, Wei paid $11.3 million to acquire the project from a company chaired by his own son, China Soft Power Technology Holdings Ltd.
China Soft Power is a holding company listed in Hong Kong but incorporated in Bermuda. On Oct. 7, the company informed its investors that it expected to "record a significant decrease in its net loss" for the six months ended Sept. 30. It also reported a loss of about 1.2 billion Hong Kong dollars ($154.7 million) on revenue for the fiscal year that ended March 31.
Meanwhile, hundreds of millions of dollars were invested by Google, Facebook and Microsoft Corp. in underwater cables to carry the world's Internet traffic and ensure sufficient network capacity to transport information between their data centers. The investments have affected the telephone companies, which dominate the market for almost a century.
According to the report, Google is familiar with the Pacific market and Pacific Light would become its third publicly-disclosed investment in the region.
Earlier this year, Facebook also bared plans to build a new trans-Atlantic cable with Microsoft and Telefonica SA, a Spanish telecom provider.
Both Facebook and Google have tried to penetrate into the Chinese market but they were blocked from the country. However, Hong Kong is considered a major regional network hub outside of China's firewall.
"If you can get a good reliable cable into Hong Kong, it really puts the content providers in a really good position to serve those lucrative Southeast Asian markets," Michael Ruddy, director of international research for industry consultancy Terabit Consulting, said.