Broken Connections in Asia

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HGC, which has more than 60 carrier and ISP customers worldwide, says it lost 50%-60% of its capacity outside mainland China. It restored 98% of its corporate circuits within one and a half days.

Kwok said HGC also provided capacity to other carriers around the region, including Taiwan's Chunghwa Telecom.

HGC ran its replacement capacity through four ways. One, like Reach, is up through Shanghai and onto Japan, with some also going through Russia.

The other way is down through Singapore, and then either splitting off to the US via Australia or the long way back through Europe.

Kwok says HGC keeps basic commercial and technical agreements in place for just such an emergency. They are revisited and refreshed every month or two.

The disruption was less drastic for Indian-based VSNL, one of the world's biggest owners of subsea capacity, which opened up a "back-route" to the US via Europe.

"We are fortunate we own a lot of capacity on other systems. The cost side is more internal - the opportunity cost," said Clutterbuck.

He also dispelled the idea that satellite was a potential source of diversity, noting the latency on a 60,000-kilometer roundtrip and the much higher costs of satellite bandwidth.

But he complained that some carriers were exploiting the situation "to make a quick dollar," charging up to five times more than the regular prices for bandwidth.

Although Clutterbuck didn't single out any firms by name, other carrier executives confirmed that he was referring to firms such as Asia Netcom, which had capacity to spare after the earthquake struck.

He added: "This time we've seen some price-gouging - an opportunity to make some quick money in a short period of time. When something like this happens again, the carriers that worked together on this one will work together on the next one.

"Those guys have been lucky this time, they won't want to be unlucky next time."

However, others regard the price hikes as business as usual. Ovum analyst Matt Walker said they were "normal cases of price-gouging that result from an extraordinary circumstance. The telecom market is far from a perfect one, especially for services that require hundreds of millions of dollars of multi-year investment to create."

And an international carrier executive, who asked not to be named, said: "Everyone does it - Reach, VSNL, ANC, FLAG, they all put their prices up."

THE NEXT TIME
Just how did it happen that every Asian subsea cable got hit by a single event?

Consultant John Hibbard said the loss of bandwidth from a Taiwan earthquake should have come as no surprise.

"Three years ago we had an earthquake in the Taiwan area and we lost five [cables]," he said.

"The fact that it's come back suggests that there's significant risk, and therefore particular care has to be taken in both network design and cable implementation to make sure you don't get multiple failures.

"It could be another 50 years [before another big quake], but I would not be betting on it," said Hibbard. "Something could happen in the next five years, certainly within the planning horizon of the current systems and on the new systems that are being planned."

Hibbard said one solution might be to go terrestrial across the Philippines, where cables already land, and run a cable east to Guam. Other executives said this might work, but it meant relying on the fraught local telecoms environment, where the intense competition between PLDT and Globe Telecom makes operating difficult for foreign carriers.

In fact, most in the industry defend the current cable routes.

Kwok says the location is "very logical." Unlike the waters of the Taiwan Strait, which are shallow and full of fishing boats, the cables are laid in waters more than 4 kilometers deep. Not a single cable runs through the Taiwan Strait, which also carries some political risk.

"I don't think there's a better route," says Reach CEO John Wright. "Going to the US you don't really have a whole lot of options."

Some people, like Kwok, predict that this will accelerate fresh deployments. ANC, for one, announced in January a new trans-Pacific cable with design capacity of 2.56 Tbps which will link the Philippines directly with Japan.

But if there is a lesson from the Boxing Day earthquake, it might be that the best-equipped are carriers that are asset-light and use multiple cable systems.

Worst-placed are cable owners that rely on their own one or two cable systems.

"You put your traffic in as many cables as you can," says Kwok. "You plan a diverse network and plan for outages as well."

VSNL's Clutterbuck says he will keep a permanent back-route through Europe as backup for his trans-Pacific link, even though it's "a little more costly and a bit slower."

"It's a choice of having some delay or not having any connectivity at all."

IN THE QUAKE ZONE
Northeast Asia is one of the most active seismological zones in the world, making it a dicey area for telecom companies laying subsea cables.

Yet Taiwan's strategic location makes it unavoidable for cable builders wanting to connect Asean with northeast Asia and across the Pacific to the US.

Just as the Taiwan Strait between the island and the mainland is a critical shipping channel, the Luzon Strait to Taiwan's south is jam-packed with subsea fiber. It's also the shortest and most economic route between Asean and the US.

Most of Taiwan's seismic activity takes place in the center and north of the island.

The quake that hit at 8.26 pm on December 26 was in fact in Taiwan's most seismically stable area. On average Taiwan's south coast sees less than one significant quake a year - defined as Richter 5 or above by the US Geological Survey (USGS) - compared with four to five in north and central parts of the island.

The Taiwan Central Weather Bureau Board reported a quake of 6.7 on the Richter scale about 23 kilometers south-west of Hengchun Taiwan's southern tip.

Other agencies measured it differently: the USGS estimated it at 7.1, and the Hong Kong and Japanese authorities at 7.2. USGS said a second quake, measuring 6.9, and took place eight minutes later in the same region.

In any case, it was the largest quake in the area for 100 years, according to the Taiwan Central News Agency.

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