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Arctic Fibre in talks to extend proposed optic cable to Shanghai

Arctic Fibre Inc. is proposing to lay a 15,600-kilometre fibre optic cable through the Northwest Passage from Tokyo to London.


Arctic Fibre Inc., which is proposing to lay a 15,600-kilometre fibre optic cable through the Northwest Passage from Tokyo to London, is engaged in talks with Chinese carriers to extend the network to Shanghai, the company's chief executive officer Doug Cunningham said.

Adding Shanghai to the network would allow the Toronto-based company to tap the commercial centre of the world's second-largest economy, adding a populous market to one that so far includes some of the most sparsely populated communities. Mr. Cunningham declined to say which or how many Chinese entities he was in discussions with.

"If [Mr. Cunningham] finds some way of actually doing business with the Chinese then yes, it makes absolute sense," said Julian Rawle, managing partner at Pioneer Consulting, a Boston-based consulting firm that provides technical analysis for submarine fibre optic projects. "Many companies have tried before, particularly Global Crossing Ltd., which built a cable that was intended to land in China and didn't because they couldn't get the landing rights. It's a challenging market but well worth including in your plan."

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Talks with one potential client in the U.S. led to the inclusion of Seattle in the plan, which has pushed back the $620-million project's targeted completion date to December 2015, Mr. Cunningham said in an interview. The company was previously aiming to have the network operational by late 2014.

A wholly owned subsidiary of Network Research Inc., of which Mr. Cunningham has a 50-per-cent stake, Arctic Fibre plans to connect seven coastal Arctic communities to the proposed network, which the executive says will provide service to 52 per cent of Nunavut's population. Starting next month Mr. Cunningham, along with a seven-person survey team, will travel through Nunavut to map out the Canadian portion of the network plan.

Internet service in Nunavut is currently provided only by Telesat Canada via satellite, which is much slower and more expensive than anywhere else in the country.

Arctic Fibre doesn't plan to sell Internet services directly to Canada's Arctic-area households, but will instead offer backbone services for existing carriers. Prices in the North would initially be about $419 per megabyte per month, according to the company.

However, that rate will come down over time as volumes increase, said Mr. Cunningham.

"Improved broadband connectivity is vital to enhance economic opportunities and services in Nunavut. Without significant improvement, download speeds in Nunavut will continue to be much lower than in the rest of Canada. Remote communities will continue to fall behind. Increased connectivity would improve programs and services such as tele-health, online learning, e-commerce and would diversify the economy," Premier Eva Aariak said in an e-mailed response to questions.

Mr. Cunningham "has a track record of building submarine fibre optic cables in other parts of the world, in the Caribbean specifically, so that's a major tick in the box in our industry," Pioneer Consulting's Mr. Rawle said. "If you've done it before, that gives you a lot of credibility."

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