Vocus, Nextgen sign MoU for Australia-Singapore Cable construction
- 11 November, 2015 09:40
Vocus Communications (ASX: VOC) has signed a non-binding agreement with Nextgen Networks for a 50/50 joint venture to build the Australia-Singapore Cable (ASC).
The 4600 kilometre ASC will connect Australia to Singapore and Indonesia, providing a 100Gbps connection between Australia and South-East Asia.
The US$120 million project will take approximately 18 months to complete, following finalisation of regulatory approvals and other conditions. Vocus said the project will be funded using a mix of cash, project debt and customer pre-sales.
“Our new cable will provide a high-speed, low latency path to
Singapore and Jakarta, both key growth markets and IT centres. It will
also be very beneficial for the WA economy, particularly the resource
sector, providing direct connectivity to the Asia Pacific region,” said Nextgen CEO David Yuile.
“In a broader context, the project is important nationally as it will add value to available telecommunications infrastructure and provide subsea cable diversity for governments and businesses around the country.”
“The proposal remains subject to certain conditions, including completion of due diligence and regulatory approval, which are expected to be formalised in the coming months. The ASC project is scheduled to begin construction early in 2016,” said a statement issued to the ASX by Vocus.
In September, Vocus entered into an agreement with M2 (ASX: MTU) to merge, creating the fourth largest telecommunications firm in Australia.