Chile-China submarine cable could cost up to US$650mn

A project to build a 20,000-24,000km submarine cable connecting Chile and China could cost US$550mn-650mn, according to Chile's telecoms regulator Subtel.

China's Huawei recently presented Subtel with a pre-feasibility study as part of an agreement signed in April and depending on the Subtel's analysis, a full feasibility study could be the next step.

"What we now need to do is study how to go to the next stage and, given the complexity of the project, to see what level of feasibility there is," Subtel head Rodrigo Ramírez said.

The pre-feasibility study contemplates three potential routes: Valparaíso-Juan Fernández Islands-Easter Island-Auckland-Sydney-Shanghai; Valparaíso-Juan Fernández Islands-Easter Island-Tahiti-Shanghai; and Punta Arenas-Auckland-Shanghai.

The so-called trans-Pacific cable project first came to light in February 2016, during a visit of former Subtel head Pedro Huichalaf to China. It came up again in President Michelle Bachelet's visit to China last month during which Chile joined the Asian Infrastructure Investment Bank (AIIB).

"Today, China, despite all of this wave of protectionism, is saying, I want connections, I want relationships, I want to link up to Africa, Europe and South America," Ramírez said. "With this trans-Pacific cable, Chile would become the digital gateway between Asia and Latin America."

Patricio Soto, telecommunications research manager at IDC Chile, recently told BNamericas that the fact that Chile will hold presidential elections this year could potentially delay the project or even put it on hold.

Soto also questioned the logic of building a cable to Asia given that from a connectivity standpoint Chile is "well covered" and the country's consumption of content from Asia is fairly limited. At most it would work as a backup, he said.

FIBRA AUSTRAL

Chile has another fiber project currently at the auction stage which is much more likely to come to fruition. The 3,000km, US$100mn Fibra Austral cable connecting Chile's deep south was relaunched in May with modifications to make it more attractive to potential investors, after the previous auction attempt failed to generate interest and was abandoned last October.

Ramírez told BNamericas last month that 26 companies had downloaded the bidding rules and were satisfied with the changes.

Offers for the submarine cable will be received until July 17, while offers for the terrestrial stretch will be accepted until July 3. Contracts will be awarded in October.