Asia news

E&T reports from Singapore as Tata Communications announces a US$180m investment and the Chinese government continue to build airports despite operating losses. 

Tata Communications announces APAC investments

Indian telecoms company Tata Communications has unveiled a strategic investment plan for the Asia-Pacific region that includes setting up a state-of-the-art data centre in Singapore at a cost of US$180m.

Construction of the 15,000m2 Tata Communications Exchange has already started at Singapore's Paya Lebar Business Park, 10km outside the city. The centre is expected to be open in March 2010, initially hiring 50 people.

The centre will be integrated into Tata's high-capacity Tier-1 network, and will be a key gateway into the APAC region.

Globally the company has nearly 100,000m2 of data centre space, with 50,000m2 in India and the remainder in the US, Europe and Asia.

Tata Communications president and chief operating officer Vinod Kumar said at a press conference that the centre aims to offer increased telecommunications capacity for local and international companies, focusing on the banking and media sectors.

Tata also announced completion of the main segment of its TGN-Intra Asia 3.8Tb undersea cable. The $250m 6,700km network runs from Singapore to Japan and connects Hong Kong, Vietnam and the Philippines with feeder systems to the main network. This is the first direct undersea cable system linking Singapore with Japan.

Kumar said the network had been laid away from the earthquake zones in Taiwan, after the experience of an earthquake there three years ago, which damaged all the cables linking Singapore with Japan.

The cable will increase data and voice reliability by providing a new route for traffic generated into and throughout the Asia Pacific region.

Tata's $430m spend on the two projects is part of the company's planned investment of $2bn over the next three years to expand and enhance its global infrastructure.

"The Asian market continues to be promising, even in the current economic climate," Kumar commented. "Businesses need to capitalise on the opportunities this region provides."

Loss-making small airports 'are infrastructure'

China will continue to build small airports across the country even though most of the 103 facilities existing are operating at a loss.

The Chinese government wants to develop the air transport industry to connect less developed regions with other parts of the country. Over the next two years it will invest US$29bn through the Civil Aviation Administration of China (CAAC) to expand 23 existing small airports and build 21 more. Most of the new airports will be in the western region.

Work starts immediately with the upgrading of the Luyong Airport in the Henan province in central China. The entire project will be financed by the China Airport Development and Construction Fund (CADCF) and the Federal government.

Chinese airlines contribute 5 per cent of their revenue every year to the construction fund, which is managed by CAAC.

The investment is in addition to the $20bn currently being invested under the 11th China five-year plan (2006-10) to build 48 new airports, expand 71 existing facilities and relocate 11 others.

China's plan to continue building small airports has come under fire from certain quarters of the civil aviation industry, with some saying that it is a sheer waste of public funds.

Some 89 of the 103 small airports in China are currently losing money. Small airports are those that handle fewer than 1.2 million passengers a year.

Wang Jian, secretary general of China Civil Airports Association, defended the government's actions, saying: "People from the less developed regions need to travel, and in most parts their only option is air transport. Building more small airports is part of the plan to develop the infrastructure, not whether these airports could rake in profits."

Wang pointed out that a small airport like Mianyang Nanjiao played an important role in May 2008, transporting rescue teams to the Sichuan earthquake site, when roads and railway tracks were completely wiped out in the disaster. Mianyang is the second largest city in the Sichuan province.

CAAC deputy director Yang Guoqing has promised subsidies to small loss-making airports, while local airlines that increase the frequency of their flights to these airports will also be considered for financial support.

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