Asia Mends Data Cables, Plans Aternative Routings

By Jon Herskovitz

Ships set sail on Friday to mend cables damaged by earthquakes off Taiwan that cut communication in Asia, while companies found new routes for their data to flow to prevent another disruption.

Service was back to normal on the last business day of the year with telecoms companies securing new routes via land and satellite to restore communication -- ending outages that affected banks and brokerages from Seoul to Sydney.

In the wake of the crisis, many were wondering how to keep communication flowing in a world where submarine cables are the lifeblood of telecommunications and where one glitch can cause global problems.

Communications companies said it might be time to bolster an undersea network that was built during the telecoms boom of the late 1990s but where construction has since mostly been dormant.

Financial service companies said they would start the new year by tweaking their contingency plans with the lessons learned from the outage.

An official at KT Corp., South Korea's top fixed line and broadband provider, said construction of submarine cable lines had mostly stalled since about 2000 when the air starting leaking out of the telecoms bubble.

"Since then there had been little need to build more, until recently," the official said, adding that a new line would be built to connect a booming China with the United States, and this could pave the way for renewed construction.

While some telecoms firms are considering laying more of the cables that bunch masses of thin, flexible glass fibers, the process is costly and requires international cooperation.

Standard Chartered said in a research note the quake had revealed the increased fragility of financial markets in Asia, where economies rely heavily on technology and Internet firms to spur growth.

"Losses in telecoms revenue are estimated at hundreds of million of dollars, depending on how quickly the cables are repaired and normal traffic restored," it said.

"All in all, the impact should be low, but the risks nevertheless warrant attention."

Analysts said the disruption had brought increased attention to the dangers in the region where cable networks run in the same direction, along earthquake-prone geographic lines.

Telecom operators dispatched or will soon send ships to repair the cables, with estimates saying they could be fixed in two to three weeks.

A banking source in Asia saw no major financial firms dumping their current providers because of the troubles offshore from Taiwan or any other drastic changes.

"All the banks have contingency plans. You can't help it if a cable snaps," the source said. "But we are all going to be reviewing our plans."

(With additional reporting by Rhee So-eui in Seoul)

Copyright 2006 Reuters Limited.

NOTE: For more telecom/internet/networking/computer news from the daily media, check out our feature 'Telecom Digest Extra' each day at

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Jon Herskovitz, Reuters
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