Top Chinese telecom equipment maker Huawei Technologies yesterday said it will form a joint venture with UK-based marine engineering company Global Marine Systems Limited.
The two companies have signed a memorandum of understanding (MOU) for the joint venture with the aim to "become the leader in providing submarine solutions and services globally", Huawei said in a statement.
The details about the proposed joint venture, pending regulatory approval - such as how much investment the two will pool into the venture and which company will take the controlling stake - have yet to be finalized.
Global Marine Systems operates the world's largest fleet of cable ships and subsea vehicles and is the market leader in marine cable installation and maintenance for telecommunications, as well as scientific research, oil, gas, utilities and renewable energy.
The forming of the joint venture comes at a time when the spending on high-bandwidth undersea fiber optic cable networks is seeing an upswing, with current Internet networks facing a bottleneck in capacity.
Six operators from China, South Korea and the United States in December signed a deal to build a $500 million submarine cable linking China and the US.
A powerful earthquake off the Taiwan coast recently knocked off international undersea fiber optic cables, disrupting communications in Asia and spurring the demand for safer submarine networks.
Seventeen major telecom companies in April signed a pact to build another $500 million undersea fiber optic cable between Southeast Asia and the US that would be safe from earthquakes and tsunamis.
Citing industry forecasts, Huawei and Global Marine Systems said at least 20 new supply contracts are expected to be awarded this year, totaling nearly 100,000 route-kilometers - largely driven by the two transpacific cable projects.
Their combined strength could increase the chances of Huawei and Global Marine Systems to land the contracts.
Last year, Huawei was the fastest-growing vendor and the No 2 player in the global optical network market, holding a 11.3 percent share, according to market research firm Ovum-RHK.
Global Marine Systems already has a Shanghai-based joint venture with China Telecom, the fixed-line carrier in China. It also has a joint venture in Japan with NTT and another one in Singapore with SingTel and ACPL.
(China Daily May 16, 2007)