New fiber optic link boosts speed, provides redundancy in event of natural disasters
Very low latency helps financial businesses gain competitive edge; facilitates 'high-frequency' trading
FOUR East Asian countries have banded together to lay down a new high-speed submarine cable in a bid to provide faster connectivity and higher efficiency for financial institutions to conduct transactions within the region, the BBC has reported. The 7,800km Asia optical fiber-based link Submarine-cable Express (ASE) connects Japan, the Philippines, Malaysia and Singapore.
An analyst Digital News Asia spoke to said the new link is a good development for businesses in the region. Speaking via e-mail, Matt Walker (pic), principal analyst for network infrastructure at Ovum, said the cable’s impact should be positive for regional businesses as it lowers their connectivity costs while improving network performance.
“Another cable also adds to overall network resiliency,” he explained. “Since undersea cable outages are quite common – due to earthquakes, shark bites, fishing trawlers – it’s important to have multiple, overlapping resources available,” he said, adding that the ASE is a welcome development in the submarine cable world.
Malaysia’s involvement in the cable project, dubbed Cahaya Malaysia, is being led by incumbent player Telekom Malaysia (TM). Work on TM’s wholly owned 2-fiber-pair system within the 6-fiber-pair ASE system linking Malaysia to Japan, the Philippines and Singapore began in January 2011. Another link connecting to Hong Kong is expected to be completed in the first quarter of 2013.
TM noted ASE is being deployed with a total carrying capacity exceeding 15 terabits per second (Tbps) riding on a 40 Gbps Dense Wavelength Division Multiplexing (DWDM) optical technology, and will eventually incorporate 100 Gbps technology. The BBC added that the ASE transfers data three milliseconds faster than any other cable between Singapore and Tokyo.
The BBC noted that the shortened latency times for data transmission may sound insignificant but in the world of so-called “high frequency trades” – controlled by computers involved in making hundreds of thousands of transaction in less than a second – this could prove critical for businesses engaged in such practices in the region.
Citing Ralph Silva, a strategist at Silva Research Network, the news portal said, “With banks and hedge funds competing against each other, the size of the profit or loss can come down to a matter of beating the competition by a fraction of a second.
"High frequency trading is basically computer trading – you program a set of rules and as events happen – the computer decides buy or sell commands," the BBC quoted Silva as saying.
"As all incoming data is received by all banks at the same time, and because the computers are all the same with the same speed of processors, the length of time the command takes to get to the exchange makes a big difference.
“So if all banks come to the same trading decision at the same time, the one to get the transaction to the master computer first wins. Three milliseconds in computer time is [like] an hour in human time."
Besides achieving better efficiency, the new cable has been designed to provide diversity routing so as to provide redundancy to other submarine cable companies operating in the region.
East Asia is known for active seismic activity and has been an area prone to natural disasters for years. An earthquake in 2006 in the south-west coast of Taiwan knocked off major links within the region, as did the devastating tremor which hit Japan in March last year. Both disasters caused great losses to companies operating in the region.
TM said the ASE cable system would provide alternative diverse routing within Asia Pacific to avoid areas prone to seismic activities, which are hazardous to undersea cables.
It also has the potential to provide an alternative route as well as restoration paths to existing cable systems in the region as it is designed to provide seamless interconnection to existing trans-Pacific cable systems linking Asia-Pacific to North America such as UNITY, Trans Pacific Express (TPE), Tata Global Network (TGN), PC-1 and the Japan-US Cable Network (JUSCN).
The ASE cable system is a collaboration between TM, Japan’s NTT Communications Corporation (NTT Com), Philippine Long Distance Telephone Company (PLDT) and Singapore’s StarHub.