Google stock (Nasdaq: GOOG, GOOGL) will benefit from a $300 million deal announced on Tuesday. The innovative tech company said it will work with five Asian telecom companies to develop and implement a trans-Pacific cable that will connect Japan and the United States undersea.
"If I were a traditional telecom operator I would be terrified," Money Morning Chief Investment Strategist Keith Fitz-Gerald said of the news. "This highlights how much is at stake and will give Google a significant leg up on the 'Internet of Everything.'"
The submarine cable has a name: FASTER. And it'll be built as soon as possible - construction will commence immediately, according to NEC Corp. (TYO: 6701), the system supplier for the line. FASTER is expected to be fully operational by second-quarter 2016.
U.S. cities Los Angeles, Portland, San Francisco, and Seattle will be connected to the Japanese cities of Chikura and Shima.
TechCrunch notes that Google's choice of U.S. cities will put FASTER close to the company's data center in The Dalles, Ore., which will give that facility a better connection to Japan.
FASTER will reach initial speeds of up to 60 terabytes per second (TB/s). By comparison, Comcast internet typically operates at 50 megabytes per second (MB/s). One gigabyte (GB) is equivalent to 1,024 MB, and one TB is equivalent to 1,025 GB. That means FASTER will be 60,000,000 times faster than Comcast internet.
"60 TB/s is in a speed range that typically defines an entire network load," Maintainn developer and MT LLC engineer Rami Abraham said. "If a single computer had such a dedicated connection, the user could download, for example, around 80,000 HD movies in 1 second. That's fast."
Google senior vice president of technical infrastructure Urs Hölzle posted the announcement on Google+ on Monday morning:
"At Google we want our products to be fast and reliable, and that requires a great network infrastructure, whether it's for the more than a billion Android users or developers building products on Google Cloud Platform. And sometimes the fastest path requires going through an ocean. That's why we're investing in FASTER, a new undersea cable that will connect major West Coast cities in the US to two coastal locations in Japan with a design capacity of 60 Tbps (that's about ten million times faster than your cable modem). Along with our previous investments - UNITY in 2008 and SJC (South-East Asia Japan Cable) in 2011, FASTER will make the internet, well, faster and more reliable for our users in Asia."
You see, it turns out that the United States and Japan are already connected via submarine cable, compliments of Google...
Hölzle is referencing a 2008 deal in which Google joined up with others to finance a 3.3 Tb/s trans-Pacific Unity cable that links the U.S. to Japan. The company also helped build the Southeast Asia-Japan Cable for a $400 million price tag. It works at speeds of up to 28 Tb/s and went operation in June 2013.
But at 60 Tb/s, FASTER will be - you guessed it - the fastest undersea cable to connect the two countries by far.
The five Asian companies working with Google on the project include China Mobile Ltd. (NYSE ADR: CHL), China Telecom Corp. Ltd. (NYSE ADR: CHA), KDDI Corp. (TYO: 9433), Singapore Telecommunications Ltd. (SGX: Z74), and TIME dotCom Berhad.
"This deal is also a significant step for Google when you look at who's going to be working together to make this happen," Fitz-Gerald said.
As Google continues to push the envelope with forward-thinking investments like FASTER, Google stock - and its investors, will reap the benefits.
"Given Google's widespread initiatives in things like fiber and wearable tech, I believe Google is really a bunch of companies. Ultimately the value is going to get unlocked down the line in a series of spin-offs - or even an antitrust suit," Fitz-Gerald said. "I think this is a super move on Google's behalf because it will help unlock yet more value in the stock. Google stock is a long-term buy for sure if investors have the stomach and the wallet for it."
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