SANTIAGO (Reuters) - Chile on Friday took a step toward building the first fiber-optic cable to directly connect South America and Asia, a project that has piqued the interest of China’s Huawei [HWT.UL] and Japan’s NEC (6701.T).
The Transportation and Telecommunications ministry said it signed a $3 million agreement with the Development Bank of Latin America (CAF) to finance a feasibility study for the approximately 24,000-km (15,000-mile) trans-Pacific cable.
Chile will begin accepting bids for the study next week. The ministry said it expects results by June 2020, after which it will launch a new tender for the installation of the submarine cable.
Gloria Hutt Hesse, Chile’s telecommunication’s minister, said in a statement the cable “would position the country as the gateway for the entry of data to the region and as an attractive location to establish data centers.”
Argentina, Brazil and Ecuador have all expressed interest in the cable, the ministry said.
Huawei and NEC submitted pre-feasibility studies for the cable in 2017, assessing potential routes across the Pacific Ocean.
President Sebastian Pinera met with Huawei executives on a visit to China in April. Huawei said Pinera had invited the company to participate in an upcoming government auction for the project.
Chile’s call for proposals comes as the country works to entice Amazon Web Services, a unit of Amazon.com Inc (AMZN.O), to install a data center in the South American nation.
Both Chile and Argentina are vying for Amazon’s investment.
Reporting by Dave Sherwood and Natalia Ramos; Editing by Cynthia Osterman