Southern Cross Cable Network (SCCN) and its shareholders Spark New Zealand, Singtel and Verizon Business announced that Australian operator Telstra has agreed to purchase a 25 percent stake in SCCN and capacity on both the existing network and the new Southern Cross NEXT subsea cable.
The share purchase and capacity purchase are inter-conditional, and both are subject to definitive documentation and relevant regulatory approvals. Telstra will acquire new shares for an undisclosed amount, leading to a dilution in the stakes of the other shareholders.
SCCN owns and operates the trans-Pacific Southern Cross Cable and has initiated work on the Southern Cross NEXT cable. Southern Cross NEXT will be a high capacity express route, providing data-centre connectivity between Sydney, Auckland and Los Angeles, and is scheduled for completion by end-2020. Given its design and route, it will be the lowest latency path from Australia and New Zealand to the United States, SCCN said.
The new 12,250 kilometre cable system has been developed as an extension of the existing Southern Cross system. It is designed to allow customers to use Southern Cross’ point-of-presence network and access infrastructure already in place. It will also assign new and existing capacity across the three routes from Australia to the US, Australia to New Zealand and New Zealand to the US.
Southern Cross NEXT is expected to cost around USD 300 million, and is designed to carry 72 Tbps of traffic. Services offered on the new system will be an extension and integration of the services offered across the current Southern Cross platform. The construction will be funded by a combination of capacity payments, equity contributions and financing.
