TOKYO -- While the U.S. is pressuring allies to help keep Huawei Technologies out of 5G cellular networks, the Chinese giant is quietly advancing in the global market for one of the most critical components of telecom infrastructure: undersea cables.
Virtually all of the world's data transmissions go through cables on the bottom of the oceans. Communications satellites are also used, but their share of the data amounts to just 1%. The U.S., Europe and Japan look like they have the cable market locked down, but their dominance may not be as secure as it seems.
Huawei put the industry on notice late last year, when it completed a cable between South America and Africa.
Right now, the world's attention is focused on Washington's drive to ban Huawei equipment from fifth-generation infrastructure, which will offer much faster wireless service than the current fourth-generation technology. Japan and Australia have essentially closed ranks with the U.S., and the Donald Trump administration is pressuring Britain, Germany and France to do the same -- reportedly going so far as to threaten to withhold important security information if they refuse.
Huawei, for its part, is showing no signs of backing down. The smartphone maker is gearing up for fresh sales drives in Europe, Southeast Asia, the Middle East and Africa. So the stage is set for a drawn-out fight between the U.S. and China over telecom technology and control of data.
In the fog of this battle, the cable issue has yet to draw much public attention. But security policymakers in the U.S., Japan and Australia are increasingly alarmed.
There are nearly 400 known submarine cables snaking across the world's seabeds. Whenever emails or digital files are sent from one continent to another, the signals pass through these wires. Countries also operate an untold number of secret underwater cables for military purposes.
The leader in the global undersea cable market is SubCom of the U.S. Japan's NEC and Europe's Alcatel Submarine Networks rank second and third. Taken together, these three companies have laid over 90% of the world's total known cable length.
But Huawei, which has been blacklisted by the Trump administration and has become the poster child for the U.S.-China trade war, is chipping away at the West's control of the market.
About a decade ago, Huawei entered the business by setting up a joint venture with British company Global Marine Systems. It expanded its presence by laying short links in regions like Southeast Asia and the Russian Far East. But last September, Huawei surprised industry executives in Japan, the U.S. and Europe by completing a 6,000 km trans-Atlantic cable linking Brazil with Cameroon.
This showed Huawei has acquired advanced capabilities, even though it is still far behind the established players in terms of experience and cable volume.
During the 2015-2020 period, Huawei is expected to complete 20 new cables -- mostly short ones of less than 1,000 km. Even when these are finished, Huawei's market share will be less than 10%. Over the long term, however, the company could emerge as a player to be reckoned with.
Huawei is estimated to be involved in around 30 undersea cable projects at the moment. It also reportedly has a hand in about 60 projects to enhance cable landing stations to boost transmission capacity.
The reality is, even if the U.S. succeeds in shutting out Huawei from 5G networks in major countries, the Chinese company could still thwart American efforts to maintain leadership in handling global data traffic.
Security policymakers in the U.S., Japan and Australia have started working together to address this potential threat.
Steps they are considering include banning Huawei from laying cables connected to one of the three countries, and urging other governments to prevent the company from getting involved in the construction of any major cables. Informed sources, however, see at least three reasons why it will be difficult to block Huawei's progress.
First, in only a decade, Huawei has been able to challenge Western players on distance. In addition to the Brazil-Cameroon cable, the Chinese giant is building links between Pakistan and Kenya and between Djibouti and France.
Second, Huawei already has highly competitive technologies for land-based telecommunications infrastructure. It can capitalize on this know-how to supply submarine repeaters, or devices that restore the waning strength of light signals en route, and transmission equipment at landing stations.
Third, Huawei can benefit from Beijing's policy to promote the construction of digital infrastructure by Chinese companies around the world under its Belt and Road infrastructure investment initiative. It is not known how much support Huawei is receiving from Beijing, but it may have a significant cost advantage versus Japanese, American and European rivals.
How, then, should the world respond to Huawei's push into the cable business?
It is virtually impossible to completely exclude Chinese companies from international infrastructure development, and it would be unwise to try to do so. With data traffic soaring, there is huge demand for new underwater cables in the Asia-Pacific region, and it would be difficult for the big industry powers to meet this demand alone.
Japanese, U.S. and European players, however, need to focus on maintaining their collective control of "core routes" that carry sensitive security information and technology data.
Specifically, on top of Japan, the U.S. and Australia, cables connected to NATO members should be off-limits to Huawei. Governments should take policy action to ensure such projects are restricted to American, Japanese and European contractors.
Another urgent policy challenge is to strengthen the security of landing stations. Experts say it is difficult to intercept information streaming through the optical fibers in undersea cables. But it is possible to eavesdrop on communications passing through landing stations.
Governments should do more to ensure the stations are protected from interceptions and other threats, including terrorist attacks. If a landing station for a key submarine cable were to be destroyed, huge amounts of international business and other vital communications could be immediately lost, with devastating consequences.
Competition over underwater cables is nothing new. After the end of World War I, there was a fierce tussle among the victors over how cables laid by Germany should be divvied up. The players were well-aware that controlling cables was a powerful geopolitical advantage.
In the process, Japan acquired a cable running between Yap Island in the South Pacific and Shanghai, a link that laid a foundation for developing the country's international telecommunications network.
Now, it is the U.S. and China competing for global hegemony, and the ocean floor is shaping up to be a major battleground.