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EXCLUSIVE: China-US row deals body blow to Hibernian Express

11 February 2013 | Richard Irving


Hibernia Networks has halted all work on its flagship $300 million transatlantic cable, the Hibernian Express, after becoming embroiled in mounting tensions between the US and China over cyber security.

The company was forced to suspend all work on the project, the first attempt to lay a cable across the Atlantic in more than a decade, after key US carriers gave warning that they would not be able to use the proposed network for fear of risking the loss of lucrative contracts with US federal government agencies.

The delay marks the first big casualty in the escalating row between the US and China over alleged links between Chinese equipment makers and the country’s secret services. The development also highlights the growing determination of US authorities to blacklist Chinese equipment makers from new infrastructure projects that could affect the integrity of US networks.

Mike Saunders, vice president of business development at Hibernia, told Capacity that the crisis would...

Comments

  • It's not just the vendor community that will be monitoring this situation extremely closely. In its response statement on Wednesday, Huawei said 45 out of 50 leading telcos use their services. If the US plays hardball, this could have huge implications for major players in the market.

    Alex Hawkes Feb 15, 2013

  • It will be interesting to determine whether the national security concerns on Huawei Marine Networks will now present an opportunity to maligned repeatered system providers, like Alcatel-Lucent, as mentioned. Perhaps if more stories like this are revealed it will lead the US to assess and or alter its view on a straight ban.

    Kavit Majithia Feb 15, 2013

  • While it is understandable that national security concerns of a US House Intelligence Committee trump most other considerations, it has been a point of issue in the industry for some time that guidance / regulations from US "Team Telecom" are at best unclear and may be non-existent. The impact of this opacity on Hibernia, a well-established transatlantic operator with an innovative business case for a new cable, is obvious. Cancellation of the supply contract incurs financial penalties and allows competing proposals for new low latency systems to steal a march. The impact on the system supply market is more significant. The industry has been waiting for the upstart Huawei Marine Networks to prove itself with the installation of an ultra-long haul repeatered system and Hibernia Express was probably the most likely candidate in HMN's sales pipeline. This leaves a thin field of turnkey repeatered system providers which faces further uncertainty because the market leader, Alcatel-Lucent, is apparently looking to sell off its submarine system business. Although the US can point to the precedent created last year by the Australian government who explicitly banned Huawei equipment from their National Broadband Network, one has to ask whether a straight ban, official or unofficial, is the best solution when it sacrifices competition and innovation at the altar of national security.

    Julian Rawle Feb 11, 2013

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