Five major telecom operators from Taiwan and China signed a contract Thursday to build the first undersea cable directly linking the island and the mainland to meet mounting demand, officials said.
Chang Xiaobin, chairman of China Unicom, signed the contract during a ceremony in Taipei that also included representatives from Chunghwa Telecom and three other leading telecom operators from the island.
Under the contract, pending the Taiwanese government's final approval, a 220-kilometre (136-mile) undersea cable will link Tamshui, a coastal town in the island's north, with southeast China's Fuzhou city.
If the project is realised, the cable will become the first of its kind since 1949 after Taiwan and China split at the end of a civil war.
Two other Chinese telecom operators will sign the contract, thought to be worth around Tw$800 million ($26 million), at a later date.
"Clients' demand for Internet and audio-video transmission from the two sides are very strong," an official at Chunghua Telecom told AFP.
Demand is expected to surge in the years ahead as Chinese telecom operators press for third-generation mobile communication, and so-called "cloud computing" -- whereby shared resources, software, and information are hosted online -- moves up telecom operators' development agendas.
The undersea cable project comes amid fast-warming ties between Taiwan and its former bitter rival China under China-friendly President Ma Ying-jeou, who took office in May 2008 on promises to boost economic ties with the mainland.
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