Chile-China submarine cable could cost as much as $650 million
The Chilean Ministry of Communications said the project to build a 20,000-24,000-kilometer submarine cable linking Chile and China could cost between $550 million and $650 million.
Recently, Huawei submitted a preliminary feasibility study of the project to the Chilean Ministry of Communications as part of the agreement signed in April. A full feasibility study could be the next step, according to an analysis by the Ministry of Communications.
"Given the complexity of the project, what we need to do now is to study how to move to the next stage," said Rodrigo Ramírez, director of communications.
The preliminary feasibility study considered three potential paths: Valparaiso - Juan Fernandez Islands - Easter Island - Auckland - Sydney - Shanghai; Valparaiso - Juan Fernandez Islands - Easter Island - Tahi Teshima - Shanghai; Punta Arenas - Oakland - Shanghai.
The trans-Pacific submarine cable project debuted in February 2016 during a visit to China by former Chilean communications minister Pedro Huichalaf. Chilean President Michelle Bachelet made it again during his visit to China last month, during which Chile joined the Asian Infrastructure Investment Bank.
"With this trans-Pacific cable, Chile will become a digital gateway between Asia and Latin America," Ramírez said.
The fact that Chile is holding presidential elections this year could delay the project or even put it on hold, IDC Chile telecom research manager Patricio Soto said recently.
Soto also questioned the logic of building a submarine cable to Asia, as Chile is "well covered" from a connectivity perspective and the country's consumption of content in Asia is fairly limited. This item can be used as a backup at most.
Another submarine cable project currently in the auction phase in Chile is more likely to materialize. The 3,000-kilometer, $100 million Fibra Austral project linking Chile's deep south was relaunched in May with adjustments to make it more attractive to potential investors. A previous auction attempt failed to attract investment and was abandoned in October last year.
Ramírez revealed last month that 26 companies had downloaded the bidding rules and were happy with the changes.
Bids for submarine cables will be received by July 17, while bids for terrestrial cables are due by July 3. The project contract will be awarded in October.