The Pacific island nation of Nauru is negotiating for the construction of an undersea communications cable that would connect to an Australian network after the rejection of a Chinese proposal, two sources said.
The United States and its Indo-Pacific allies are concerned that cables laid by the People’s Republic of China (PRC) could compromise regional security. Beijing has denied any intent to use commercial fiber-optic cables, which have far greater data capacity than satellites, for spying.
Nauru, which has strong ties to U.S. ally Australia, helped scupper a World Bank-led cable tender earlier in 2021 over concerns the contract would be awarded to the former Huawei Marine, now called HMN Tech, after the Chinese firm lodged a bid priced at more than 20% below rivals.
The nation of just over 12,000 people has approached the Asian Development Bank (ADB) to help fund an alternative.
“ADB is involved in very early discussions with the government of Nauru to explore possible options to help fund an undersea cable to deliver low-cost, high-quality internet service,” the ADB said in a statement. “The details of the connection arrangement and funding sources will be determined in due course.”
The two sources said the new plan would involve laying a cable from Nauru to the Solomon Islands capital of Honiara about 1,250 kilometers away.
The new line would then tap into the Coral Sea Cable system, a 4,700-kilometer network that connects Australia to the Solomon Islands and Papua New Guinea. That system, majority funded by Australia and built by Sydney-headquartered Vocus Group, was completed in 2019 to shut out a competing offer from Huawei Marine, then owned by Huawei Technologies.
HMN Tech is majority owned by Shanghai-listed Hengtong Optic-Electric Co. Ltd. after Huawei Technologies sold the submarine cable business in 2020.
Nauru’s plan needs support from Australia and the Solomon Islands, the sources said. It is unclear whether Nauru has requested financial assistance from Australia or whether it only needs Canberra’s permission to join the Coral Sea Cable system.
The governments of Australia, Nauru and the Solomon Islands did not respond to requests for comment. The World Bank said it was not involved in discussions about cables connecting with Nauru.
Nauru was the first to raise concerns over HMN Tech’s bid to build subsea cables for Nauru, the Federated States of Micronesia and Kiribati, sources said in December 2020. The U.S. followed up by warning that the bid posed a regional security threat.
IMAGE CREDIT: ISTOCK