NEC, a leading Asian undersea cable manufacturer and installer, may receive hundreds of millions of dollars in subsidies from the Japanese government to acquire specialized cable-laying vessels for digital infrastructure projects.

A government statement said that Japan is considering helping cover up to half the cost—potentially $500 million—for two ships, with each vessel estimated at $300 million. It said that the action was necessary because nearly all of Japan’s communications depend on subsea cables, yet domestic firms currently lack sovereign cable-laying capacity. NEC has relied on leasing a Norwegian vessel and other short-term charters, which officials say has exposed Japan to supply chain vulnerabilities and security risks. With foreign competitors in the U.S., France and China owning dedicated fleets, Japan’s government called its lack of owned ships “very serious.”

If approved, NEC’s first ship could be operational by 2027, strengthening the country’s ability to quickly deploy and repair digital networks. The news was posted by Tech Space 2.0 and reported by the Financial Times.

The final approval for Japan’s planned subsidies to NEC for cable-laying vessels would come from the Japanese Cabinet, specifically through the Ministry of Internal Affairs and Communications (MIC), which oversees telecommunications and digital infrastructure policy.

The initiative comes after years of deliberation. In 2023, Tokyo designated subsea cables as “vital infrastructure” and required operators to report suspicious activities but stopped short of deeper support. NEC’s CEO warned earlier this year that the company was “the only one fighting with no support” as rivals benefited from direct government backing. France’s Alcatel unit was nationalized, while China provides heavy subsidies to its telecom firms.

NEC’s cable manufacturing and installation businesses operate as a unified enterprise under the NEC Group umbrella, with the entire group engaged in the submarine cable system business and no separate brand names distinguishing manufacturing from installation.

Manufacturing is conducted primarily through OCC Corporation, a subsidiary of NEC, while installation and systems integration are supported by other NEC divisions such as NEC Networks & System Integration Corporation and NEC Platforms, but all activities are marketed collectively as NEC submarine cable solutions.

The current investigation marks one of the most extensive probes into cartel activity in Slovakia’s cable sector to date, signaling heightened competition enforcement in this critical infrastructure market. 

NEC Corporation has been selected to build the Asia United Gateway East (AUG East) submarine cable system, which will connect Singapore and Japan with links to Brunei, Indonesia, Malaysia, the Philippines, South Korea and Taiwan.

Per multiple reports, the 8,900 km submarine cable system will increase capacity in the East Asia region. It is being built in anticipation of the rapid growth of network traffic from artificial intelligence (AI) and AI-enabled applications. One of the key participants in the project is Singtel (Singapore Telecommunications Limited), which is Singapore’s principal telecommunications conglomerate and the country’s largest mobile network operator. It is chairing and co-leading a consortium that includes multiple major telecom and technology companies such as Amazon Web Services (AWS), Microsoft, ARTERIA Networks, Chunghwa Telecom, DREAMLINE, Globe Telecom, Telekom Malaysia and Unified National Networks.

NEC did not issue a public statement about the project, but its importance was described by Alan Tan, chairperson of the consortium committee, and Singtel’s director of submarine cable planning. “The surge in demand for high-speed connectivity and the bandwidth needed for AI innovation in the region makes developing resilient, high-capacity digital infrastructure more important than ever.” 

Citing figures from Omdia, Singtel stated that, by 2031, global network traffic from AI and AI-enhanced applications is expected to exceed that from conventional applications. By 2033, it is projected that approximately 62% of global monthly network traffic will come from AI and AI-enabled applications. “This investment will play a critical role in advancing digital inclusion and catalyzing economic growth across the region,” Tan said.

The AUG East submarine cable system is expected to be completed by the third quarter of 2029. Per Singtel, the project will deploy a “high-count fiber pair system” capable of supporting millions of simultaneous ultra-high-definition video streams. 

The ADC Consortium recently celebrated the inauguration of the Asia Direct Cable (ADC), an ambitious project that saw NEC both manufacture and install the cable that is approximately 10,000 km long.

Per press releases and multiple industry reports, the ADC connects several key locations across East and Southeast Asia, including China (Hong Kong SAR and Guangdong Province), Japan, the Philippines, Singapore, Thailand and Vietnam. ADC has multiple pairs of high-capacity optical fibers and is designed to carry more than 160 Tbps of traffic, enabling high-capacity transmission of data across the East and Southeast Asian regions.

“This new cable marks a significant milestone, providing a vital foundation to support the ever-growing communications needs of Asia and the world,” said Koji Ishii, MC Co-Chairperson of the ADC Consortium. “The milestone represents the culmination of our efforts to overcome numerous challenges, made possible through steadfast collaboration and partnerships with esteemed stakeholders from various countries, including NEC. We are confident that this cable system will significantly contribute to the development of the AI industry in the Asia region.”

“NEC has earned the trust of its clients, and the consortium is extremely satisfied with the successful completion of this cable,” said Billy Li, MC Co-Chairperson of the ADC Consortium. “It offers the greatest cable capacity and essential diversity required for Asia’s major information hubs, enabling telecom carriers and service providers to optimize their network and service planning for sustainable growth.”

“NEC is honored to have taken part in this prestigious project, which will support increasingly bandwidth-intensive applications driven by technological advancements in 5G, the cloud, the Internet-of-Things and Artificial Intelligence,” NEC Corporation Senior Vice President Tomonori Uematsu said in a press release. “We thank the consortium for their partnership and for helping us to push the boundaries of numerous challenges to bring this project to fruition.”

NEC has been a leading supplier of submarine cable systems for more than 60 years, and has built more than 400,000 km of cable, spanning the earth nearly 10 times. NEC’s subsidiary OCC Corporation manufactures optical submarine cables capable of withstanding water pressures at ocean depths beyond 8,000 meters.

The ADC Consortium includes leading communications and technology companies NT (Thailand), China Telecom, China Unicom, PLDT Inc., Singtel, SoftBank Corp., Tata Communications and Viettel.

11/1/21 –NEC Corporation has been contracted by Facebook to build an ultra-high performance transatlantic subsea fiber-optic cable connecting the U.S. and Europe, a plan that calls for capacity of up to a petabit per second.

A press release said that, until recently, subsea cable was composed of 16 fiber pairs at most. Now, using NEC’s newly developed 24-fiber pair cable and repeaters, a system can deliver a maximum transmission capacity of a half petabit per second, the highest to date for a long-distance “repeatered” optical subsea cable system. That performance represents a 50% improvement in fiber count over the 16-fiber pair systems.

Per Teleography, Facebook has a stake in 13 cables. Google has an ownership stake in at least 16 current or planned undersea cables around the world. It noted that the internet giants are the ones leading undersea cable development, displacing traditional telecom giants.

Of note, OCC, an NEC subsidiary, previously reported in March that its 24 fiber pair cable can be manufactured using a wide range of existing optical fibers, according to the needs of each new cable system. International data usage across the Atlantic is expected to expand twenty-fold in the 15 years between 2021 and 2035. The region ranks among the highest growth geographies for data traffic demand, bringing ever-greater demands to reduce the cost per bit on subsea cable networks.

Japan’s NEC Corporation has signed a contract with the National Submarine Cable Utility Belau Submarine Cable Corporation (BSCC) of the Palau Republic (Palau) for the Palau Cable 2 (PC2) cable construction project.

A press release said that PC2, with a total length of approximately 110 km, will connect Palau with the Southeast Asia–United States (SEA–US) cable that connects Southeast Asia and the U.S. mainland. BSCC, a state-owned public corporation, owns and manages a submarine fiber optic cable network for Palau. This cable is scheduled to be completed by the end of 2022.

PC2 adopts the latest optical wavelength multiplexing transmission system of 100 gigabits per second (100 Gbps). An addition to the first optical submarine cable laid by NEC in Palau in 2017, it ensures the redundancy of Palau’s network, reliable communications and the increasing demands for communications.

The Republic of Palau consists of eight principal islands and more than 250 smaller ones lying roughly 500 miles southeast of the Philippines, in Oceania. The islands of Palau constitute the westernmost part of the Caroline Islands chain. Its total land area is 177 sq mi.

Per a report in Total Telecom, in 2017, NEC began construction of three submarine cables in Micronesia, to connect the islands of Palau, Yap, and Chuuk with the SEA–US cable. NEC notes that its OCC Corporation subsidiary makes submarine optical cables able to withstand water pressure 8,000 meters beneath the sea.

NEC has won a contract from Okinawa Cellular Telephone Company to supply an optical submarine cable system connecting Okinawa Prefecture and Kagoshima Prefecture in Japan to be in operation in April 2020. 

A press release said that NEC will provide the optical submarine cable system as a turnkey solution. The cable will be manufactured by NEC’s subsidiary OCC Corporation, which it noted is the only company in Japan that can make optical submarine cables capable of withstanding the water pressure from 8,000 m deep seas.

The cable system will be connected to Nago City, Okinawa Prefecture, and Hioki City, Kagoshima Prefecture, with a total length of approximately 760 km and at a maximum depth of approximately 1,200 m. The system will employ the latest optical wavelength multiplex transmission method, with maximum design transmission capacity of 80 Tbps.

NEC, as a system integrator, will provides all aspects of submarine cable operations, including the optical transmission terminal stations, optical submarine repeaters, optical submarine cables, ocean surveys and route designs, installation of equipment and cable, and training and delivery testing.