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China Telecom, Chunghwa Telecom to co-operate on undersea cable

Perhaps reflecting a thaw in the frosty relations between Mainland China and Taiwan, the largest fixed-line operators from each country - Chunghwa Telecom and China Telecom - are set to spend nearly US$15 million on an undersea link.

Chunghwa Telecom, the largest phone company in Taiwan by sales, and China Telecom, which is China's largest fixed-line operator by subscriber, will collaborate on a pioneering project to link Xiamen on Mainland China with Kinmen Island on Taiwan. While the two countries have worked before on more regionally oriented projects (only a few months ago. the two appeared with other local companies in an MoU to construct an Asia-Pacific undersea cable system) this is the first time that such direct co-operation has been authorised for an undersea cabling project.

The election of Taiwanese President Ma Ying-jeou twelve months ago is generally seen as sparking an improvement in relations between the two states. Taiwan has recently been experiencing economic difficulties although there is nothing new, for example, in Taiwanese businessmen placing orders for computer components with mainland Chinese companies.

A more immediate and encouraging sign of co-existence is the re-introduction of flights between Taiwan and China. There is even the possibility of mainland companies buying into Taiwanese companies over an estimated 100 different industrial sectors.

Build-time for the 60 km cable is set at 20 months but nether company has agreed on its share of the project. A proposal was submitted to the government of Taiwan nearly three months ago; this has meant that information has been difficult to pin down as the Taipei government is still evaluating the proposals from Chungwa Telecom. China Telecom was also unable to expand on existing information.

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