Huawei, US firm vie for cable deal

China’s Huawei Technologies and US submarine cable firm SubCom are facing off for a strategic undersea internet cable project of Converge ICT, an aggressive player in the Philippines’ fixed-broadband sector.

Miles Tonn Chua, chief operating officer of Converge subsidiary Metro Works, told the Inquirer that they are in “final negotiations” with Huawei and Subcom for a contract to lay down some 1,300 kilometers of submarine cables for Converge’s domestic backbone.

The project will link Luzon, Visayas and Mindanao via 20 landing stations at a cost of over $40 million (P2.1 billion), Chua said.

“I would expect that we can award the project by July,” Chua said, adding that the entire project should be finished by the first quarter of 2020.

The project will help seal Converge’s position as a major player in the country’s still-nascent fiber business, with earlier estimates pegging nationwide penetration at around 5 percent.

The domestic submarine cable is part of Converge’s five-year nationwide fiber rollout announced in August last year.

That plan involved spending around $1.8 billion with partners such as South Korea’s KT Corp. and LSI-Fibernet Konstruk Corp., a Filipino-Korean venture partly owned by Converge founder Dennis Anthony H. Uy.

Two sources with knowledge of the matter said Huawei’s potential participation in Converge’s submarine cable project had worried even US government officials stationed in the Philippines.

The US recently included Huawei and its affiliates in a trade blacklist due to spying concerns through its wide range of products, which includes equipment for wireless networks and high-tech smartphones. Huawei has strongly denied those accusations.

Chua, however, said this was not an immediate issue since the current submarine project involved installing the cables and not the equipment that would carry the data. He said this would be bid out later this year under a separate tender.

“This gives us more flexibility,” Chua said.

Huawei and Subcom, considered a leading player in the undersea cable industry, were also rivals in a massive undersea project that will link Australia and Hong Kong. Subcom won after Huawei was shut out of the project.

Huawei is also a major network supplier of both PLDT Inc. and Globe Telecom, which are moving forward with the launch of pilot fifth-generation (5G) mobile services this year.