MANILA/TAIPEI – A 7,800km underwater optical fiber data cable, called the Asia Submarine-cable Express (ASE), which links Japan, Singapore, the Philippines and Malaysia, has opened for traffic. It is the first direct cable link between the Philippines and Japan, according to one of the developers.
ASE can manage data transfer as fast as 40 gigabits per second. It joins existing undersea cables around Japan, including those operated by Telstra International, Taiwan’s Chunghwa Telecom, and Pacnet which links Singapore and Hong Kong, although these were damaged by an earthquake off Japan’s coast in March last year, the BBC reported.
It is hoped that the new cables will bolster speeds between the countries particularly for high frequency trades.
These are used by financial institutions to make trades where speed is imperative, sometimes up to hundreds of thousands of transaction in under a second, based on algorithms that oversee market conditions and make a call on the appropriate buy or sell actions.
So-called “high frequency trades”, controlled by computers, involve making what may be hundreds of thousands of transactions in less than a second – all determined by a program that tracks market conditions.
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, said Ralph Silva, a strategist at Silva Research Network.
“High frequency trading is basically computer trading – you program a set of rules and as events happen – the computer decides buy or sell commands,” he was quoted as saying by the BBC.
“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,” he said.
“Three milliseconds in computer time is an hour in human time,” he added.
The route for the new cable was chosen to be as straight as possible, reducing the time to get information from one end to the other to 65 milliseconds.
ASE’s route is as straight as can be to reduce data transfer times.
Because of the natural disaster threat, ASE avoids the area around Taiwan where earthquakes are common.
Instead the route is as near to the Philippines as possible, which a senior director at NTT – one of four project partners – claimed makes it significantly safer and more reliable.
The problems helped influence where the new cable was laid, said Japan’s biggest telecommunications provider.
“We avoided the area around Taiwan, where earthquakes are common, and laid the route near the Philippines instead, making the cable very safe and reliable,” Hiroyuki Matsumoto, senior director of network services at NTT, one of the four partners involved in the project said.
The other companies are the Philippines’ PLDT, Singapore’s StarHub, and Telekom Malaysia. – SG/Agencies