skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


Over-the-top (OTT) providers Amazon, Facebook, and Google have several US-Hong Kong subsea cable systems underway. While approval of these systems was once routine, escalating US national security concerns toward China are prompting more stringent evaluations of communications infrastructure projects, posing a threat to investments already made in cable system construction.

Delays in regulatory process threaten investment

These OTT providers are increasing investment in subsea cable systems, including transpacific systems linking the US and Hong Kong. However, ongoing US national security concerns regarding China’s role in global communications infrastructure plus civil unrest in Hong Kong is prompting increased regulatory scrutiny of these projects. This review process can delay progress, but more stringent reviews also raise the possibility of a project being blocked, creating substantial financial risk for the companies involved.

Cable systems with landing stations in the US require approval from the Federal Communications Commission (FCC), a process that includes review by Team Telecom, a multi-agency working group of representatives from the Departments of Homeland Security, Defense, and Justice. US-Hong Kong cable systems have received approval in the past, but recently suggestions have been made that the license application for the Pacific Light Cable Network (PLCN) is at risk of being blocked based on recommendations from Team Telecom. PLCN, planned for service by year-end 2019, links Hong Kong and California. At risk is approximately the $300m already invested in the project which is nearly complete. PLCN is backed by Google and Facebook, which each have a 20% stake in the cable. But it is the 60% ownership position held by infrastructure provider Pacific Light Data Communications (PLDC), that has called the future of the project into question. PLDC is owned by Chinese Internet provider Dr Peng Telecom & Media Group, and the company has a relationship with Huawei, two factors that put the project squarely in the sights of US national security agencies.

In addition, PLCN might not be the only system at risk. There are two other Hong Kong-US subsea systems underway: Hong Kong-Americas (HKA) and Bay to Bay Express (BtoBE). The main segment of HKA will connect Hong Kong to two landing stations in California. Facebook owns 42% of HKA and China Telecom and China Unicom own 33%, with the remainder divided among Tata Communications, Telstra, and RTI. Facebook also owns 42% of the main segment of BtoBE between Hong Kong and the US, with Amazon owning 8%, and China Mobile with 50%. These systems are in the early stages, with service dates in 2020–2021. Facebook and Amazon are undoubtedly watching PLCN very closely in order to mitigate future risk. Team Telecom does not publicize its ongoing activities, but it is certainly taking a hard look at cable systems connecting the US with China. US companies should proceed with caution when it comes to new connectivity projects in the region.


Further reading

2019 Trends to Watch: Wholesale Telecoms, GLB006-000021 (January 2019)

"Greater collaboration required across competing submarine cable systems", GLB006-000023 (February 2019)


Cindy Whelan, Principal Analyst, Wholesale Telecoms

Recommended Articles


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team: +44 7771 980316

Asia-Pacific team: +61 (0)3 960 16700

US team: +1 212-652-5335

Email us at

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now