A New Southeast Asian Subsea Cable: Hawaiki Nui

BW Group purchased the Hawaiki cable in July, 2021 from the Hawaiki Submarine Cable Limited Partnership. The Partnership's original plan was to build a sister cable known as Hawaiki Nui (Great Hawaiki). BW, a Singapore company, has pursued this idea and finally signed earlier this year a Memorandum Of Understanding with TELIN, the international cable subsidiary of the Indonesian PTT. The MOU is really the partnership or consortium agreement and typically only happens once funding has been secured and all parties are fully onboard. The fact that Hawaiki Nui cable was announced in 2021 and just achieved the critical MOU milestone tells me that it has been very difficult to get this project off the ground. My speculation is that the cable's estimated cost is very high because it requires deep burial in the shallow waters of Indonesia; moreover, a very thorough and expensive marine survey is also necessary. Another challenge is that the cable's route requires Indonesia government permitting, which has been a nightmare for other projects venturing into its territorial waters. As a result Investor hesitation is only natural given the big price tag, lots of competing projects such as Subco's new cable connecting Australia's underbelly to Singapore and the potential permitting delays. Hawaiki Nui will have 12 fibre pairs with an design capacity of 240 Tbps. Telstra has been able to keep Layer 1 prices high into Australia, but the combined impact of scrappy Subco, the new Google cable (Australia Connect) that uses Christmas Island as a hop to reach Singapore, and Nui Hawaiki, could slam transport prices. It seems almost inevitable to me given that Australia has only 30 million people. Transport prices will undoubtedly fall sharply once these cables go live. 

On the bright side Australia will have a remarkably resilient subsea infrastructure. The entire continent will be encircled by a ring of subsea cables with landings in key Australian cities that will enable traffic to be routed in the reverse direction in case of an outage. What I find fascinating is that Australia is becoming a telecom hub. For most of this century Australian private line prices have been artificially high due to limited competition. But now there are two major cables directly connecting Singapore to the US, namely Echo and Bifrost. On top of that Hawaiki, Southern Cross, and Hawaiki Nui provide diverse routes for US/Singapore connectivity. Higher latency, but highly diverse to the standard paths. But still much lower latency than any route to Singapore via Japan. Clearly the Australian government welcomes this development and has been probably been quick to approve these projects due to the geopolitical tensions between China and the rest of Southeast Asia. On a final note, TELIN's participation was probably necessary to grease the wheels of Indonesian government cooperation.