Facebook, Google Work On 2 New Undersea Cables To Boost Internet Capacity Between North America And SE Asia

Facebook Inc FB is planning two undersea cables, along with Alphabet Inc GOOGL GOOG, which will connect Southeast Asia with North America, Reuters reported Monday.
What Happened: The two cables named — Echo and Bifrost — will be the first to go through a new diverse route across the Java Sea and will increase trans-pacific subsea capacity by nearly 70%, according to Kevin Salvadori, Facebook’s vice president of Network Investments.

The cables will directly connect North America to some main parts of Indonesia and will raise the connectivity for the central and eastern provinces of the Southeast Asian nation, according to Reuters.

The cables will also reportedly link Singapore with North America. 

Why It Matters: Google and Facebook are working together on Echo along with Indonesian telecommunications firm XL Axiata, as per Salvadori. The cable is expected to be completed by 2023.

Bifrost, due to be finished in 2024, is being put in place in partnership with a subsidiary of Telkom, an Indonesian company, and Singapore’s Keppel conglomerate.

Facebook and Google are also reportedly funding the 12,800 KM long Pacific Light Cable Network, a project that has been resisted by the United States government in the past due to plans for a Hong Kong conduit.

The Mark Zuckerberg-led company said in March that it would halt efforts to connect California and Hong Kong due to “ongoing concerns” from the U.S., reported Reuters.

Last year in April, the federal government gave approval to a Google plan to temporarily operate an undersea cable between Taiwan and the U.S.

The search engine giant said last year it would lay an undersea fiber-optic cable, dubbed — the “Grace Hopper” — between the U.S., the United Kingdom, and Spain to boost its services.

Price Action: Facebook shares closed 1.54% higher at $283.02 on Friday. On the same day, Alphabet Class A and C shares fell almost 0.4% to $2,024.73 and $2,035.55 respectively.