BEIJING, Jun. 24, 2009 (Xinhua News Agency) -- An undersea telecommunications cable linking a mainland coastal city and an outlying island of Taiwan could be put into operation as early as the end of this year.

The undersea cable, which will link the Chinese mainland and Taiwan for the first time, will increase the speed of information exchange by up to 10 times, Wednesday's China Daily quoted China Telecom, the mainland's largest fixed line service, as saying.

Preparation work has been completed for the construction of the first cross-Straits undersea telecommunications cable project linking the mainland's Xiamen and Taiwan's Kinmen island, known as Jinmen on the mainland.

"As of now, telecommunication across the Straits transits via a third place like Hong Kong, Australia or Japan. With the new cable linking, the speed of information exchange will be much faster," a senior China Telecom official surnamed Zhang was quoted by the newspaper as saying.

China Telecom, also the mainland's biggest mobile telecommunication provider, said it would cooperate with Taiwan-based Chunghwa Telecom. (NYSE:CHT) Each will invest 100 million yuan (14.6 million U.S. dollars) to build the 50 km to 60 km undersea cable.

The project was estimated to create 600 billion yuan in potential business opportunities for Taiwanese companies in the mainland's 3G market.

Xiamen and Kinmen are the closest places to the mainland and Taiwan. About 4,000 Kinmen people live in Xiamen, and own about 10,000 apartments.