Bloomberg | January 21, 2011 | Jason Clenfield and Maki Shiraki
NEC Corp., Japan’s largest maker of phone-network equipment, won an order valued at about 30 billion yen ($362 million) from a group led by Nippon Telegraph & Telephone Corp. to supply undersea cables, two people familiar with the matter said.
The fiber-optic cables will connect Japan with Southeast Asia, said the people, who asked not to be identified because the deal hasn’t been made public. NEC is also in talks with a separate group on an order valued at about 20 billion yen that may be decided as early as next month, the people said.
Video downloads from Google Inc.’s Youtube and the popularity of smartphones have increased Internet traffic and revived a market for undersea cables that collapsed at the beginning of the decade. NEC is vying with Alcatel-Lucent SA and Tyco Electronics Ltd. for contracts in a $2.6 billion market that researcher Frost & Sullivan Inc. estimates will grow as much as 9 percent a year through 2015.
“There’s still a lot of potential business out there,” said Marc Einstein, a Tokyo-based analyst at Frost & Sullivan. “Given that there’s only three major players, it’s a pretty lucrative business.”