Verizon plans improved Pacific network after quake

NEW YORK (Reuters) - Verizon Communications Inc. (VZ.N) said on Thursday it will build a multiroute network across the Pacific Ocean after an earthquake in Asia disrupted service and highlighted the need for a more robust system.

Verizon Business, part of the No. 2 U.S. phone carrier, announced this month plans to build an undersea cable with five Asian partners. It will directly link China with the United States and is due for completion by the third quarter of 2008.

The company said on Thursday it would use the Transpacific Express cable to launch a "mesh" communications network to ensure uninterrupted voice and Internet service in case of a disruption by rerouting traffic on alternate lines.

Verizon will form the mesh by connecting the consortium's cable with existing fiber lines in which it holds a stake.

"This earthquake underscores that it is important, because of the seismic activity, to have multiple diverse routes to which you can seamlessly reroute traffic," Verizon Business spokesman Gil Broyles said.

Phone traffic was back to normal in parts of Asia on Thursday, but many operators in North Asia struggled to get up to full speed after the December 26 earthquake, and many Internet users in the region complained of slow connections.

Both Verizon and larger U.S. rival AT&T Inc. (T.N) said they were assessing damage to cables they use or partly own.

Verizon said it is involved in more than 65 cable networks worldwide, with 18 in the Asia-Pacific, and about six to eight lines affected by the quake and its aftershocks.

Verizon, China Telecom (0728.HK), China Netcom (0906.HK), China Unicom (0762.HK), Korea Telecom (030200.KS) and Chunghwa Telecom (2412.TW) (CHT.N) expect to spend about $500 million on an undersea cable running 18,000 km (more than 11,000 miles).

The cable is due to have about 60 times the capacity of existing lines between the United States and China, with most of them now running through Japan, which slows the service.

Verizon has not yet chosen an equipment supplier for the transpacific mesh network, Broyles said. Ciena Corp. (CIEN.O) supplied optical switches for its mesh network across the Atlantic Ocean, also announced this month.

Ciena shares rose 0.6 percent to $28.32 on the Nasdaq. Shares in leading telecoms equipment maker Cisco Systems Inc. (CSCO.O) rose 0.4 percent to $27.42.

AT&T said it was also affected by the earthquake.

"AT&T is working around the clock along with other undersea cable coalition members to fully restore all services as quickly as possible," it said. "Work continues to reroute traffic to minimize the impact of the remaining cable damage."

A spokesman declined to elaborate on the extent of the damage or estimated cost of repairs.

Verizon shares rose 0.5 percent to $37.32, while AT&T shares firmed 0.2 percent to $35.50.