The Telco Tsunami

Taiwan quakes break undersea cables, disrupting Internet connections in
Asia

28 December 2006
Christie Loh
christie@mediacorp.com.sg

WHEN an earthquake struck Taiwan at 10.26pm on Tuesday - the second
anniversary of the deadly Asian tsunami - seismologists warned of giant
waves hitting the Philippines.

They were wrong, but the ripples have now spread across Asia. Web surfing
has slowed to a crawl, leaving one of the world's most tech-savvy regions
in a virtual blackout.

The tremors cut Taiwan's external links for hours. And, when neighbouring
countries including Singapore woke up yesterday morning, they felt the
pain too. Internet connections to websites hosted overseas were painfully
slow as the quakes had broken major undersea telecommunications cables -
the fragile links that carry data between Asia and the rest of the world -
on the southern tip of Taiwan.

The damage was possibly greater than it was during the last serious
incident in 1999.

The three local telcos, all of whom are reliant on the affected cables for
data and some voice traffic, gave assurances that they were diverting
traffic to other networks while partners in Taiwan and Greater China
repaired the cables. Only local websites enjoyed normal surfing speeds.

Meanwhile, "because everyone is competing for the available bandwidth,
there is congestion now on the remaining bandwidth", SingTel spokesman
Chia Boon Chong told Today. MobileOne, which provides IDD call services,
said yesterday evening that phone lines to Taiwan were also "heavily
congested".

Earlier in the day, calls from Singapore to Taiwan could not be connected
at all, said a private banker who cannot execute any trades without verbal
approval from her Taiwanese clients.

She wasn't the only one to find her hands tied. "I can't trade if I don't
know the prices," Mr David Leong of First State Investments, which manages
equities worth US$15 billion, told Bloomberg. "I've put in limit orders to
try to minimise the damage, but even then you need to have the basic
information," he lamented.

Currency traders in Seoul said that as communications with Singapore and
Hong Kong were cut, spot trading on the Korean won with offshore brokers
had to be halted. Such transactions average around US$1.5 billion a day.

And they will have to bear with the disruption for a while more.
Taipei-based Chunghwa Telecom, the country's largest phone operator, said
the repairs could take two to three weeks while it progressively restored
parts of the network.

But Singapore's StarHub promised that normalcy here would return "after a
few days". In the meantime, traffic would "only be slow at times to our
subscribers" numbering 308,000 households, said spokeswoman Jeannie Ong.
StarHub is also working to restore transmission of two digital cable
television channels, Hallmark and TV5Monde.

This is not the first time that a Taiwan quake has extensively damaged
submarine cables. In 1999, tremors there broke the Asia Pacific Cable
Network (APCN). It is the predecessor of the US$1-billion ($1.54-billion)
APCN 2, one of the six networks currently affected and partly owned by
Asian carriers including SingTel and StarHub. The irony is that when APCN
2 was launched in 2001, it was touted as the region's first cable system
with a "self-healing function", said to be "capable of restoring itself
instantly with its ring configuration when a failure occurs in a part of
the system".

What happened to the instant healing? "It seems that the quake has been so
bad that there have been multiple breaks," said Mr Vignesa Moorthy, chief
executive of ViewQwest, a company selling Internet access to businesses.

Where there is physical damage, cable ships will have to send automated
robotic arms to fix the breakage underwater. "It's not just a software
problem. On the seabed, it's a tougher situation," telecoms analyst Victor
Liu of research firm In-Stat told Today.

The cables lie some 8km below the ocean's surface; each kilometre of cable
costs up to an estimated US$500,000 to lay. APCN 2 alone stretches 19,000
km.

While there is little that telcos can do to protect themselves against
acts of nature, they can start building alternative networks, said Mr
Bertrand Bidaud, vice-president at research firm Gartner.

One potential route is the Asia-America Gateway Cable System, which
bypasses earthquake-prone Taiwan. It "will avoid some of the areas most
prone to seismic activity, conditions which are hazardous to undersea
cables", the network's consortium of owners, including StarHub and Telekom
Malaysia, said in a press release during its launch in June this year.

But before the Asia-America system comes into service in 2008, cable
networks remain vulnerable.

Internet suppliers such as ViewQwest saw 90 per cent of its 4,000
customers deprived of access to the Web yesterday morning. If the downtime
continues and exceeds acceptable limits as defined in contractual
agreements, ViewQwest might have to compensate its customers. If so, the
company will in turn seek compensation from the carriers supplying it
Internet traffic, said Mr Moorthy.

Numbers told a bleak tale. According to Internet Traffic Report, a monitor
of global Web data flow, Asia yesterday had the slowest Web connection
with response time at 619 milliseconds, or triple the average 200
milliseconds. "This technological issue is aggravating already-thin
liquidity," BNP Paribas' senior currency analyst Thio Chin Loo told Today.

If normalcy does not return soon, companies cannot blame employees for
feeling demoralised. Ms Sumeda Kaw, marketing manager of business process
outsourcing service provider Aspirant Technologies, could not give a
potential client a "live" Internet demonstration because of the
disruption. After giving an impromptu verbal demo, a frustrated Ms Kaw was
ready to call it a day. "When the connection gets like this, you just want
to pack your bags and go home," she told Today.

Away from business concerns, those who play online games requiring high
broadband speeds were equally glum. "If the connection lags and you're
playing against other gamers, they will 'kill' you because you're reacting
more slowly or retarding," said avid gamer May Soon.