Telstra’s $697 million Pacnet acquisition creates major Asian wholesale player

Telstra’s $697 million Pacnet acquisition creates major Asian wholesale player

Telstra has taken a major step to bolster its infrastructure capabilities across Asia with the $697 million acquisition of Pacnet.

The move lands Telstra with the region’s largest privately-owned subsea cable network, providing access to 109 PoPs in the Asia-Pacific across 61 cities, as well as eight cities outside of the region in the US and Europe.

It also gives the Australian incumbent access to Pacnet’s considerable data centre footprint which covers 17 cities through 29 facilities.

The deal also includes interests in Pacnet’s Chinese joint venture, PBS, which holds a domestic IP VPN licence and provides data centre services in most provinces in China.

The acquisition looks set to significantly enhance Telstra’s wholesale and enterprise offerings, with the company planning to use Pacnet’s assets to expand its presence in cloud, unified communications, managed network services and security services.

“Asia is an important part of our growth strategy. We believe this acquisition will help us become a leading provider of enterprise services to multinational companies and carriers in the region,” David Thodey, Telstra’s CEO said.

Pacnet developed a keen focus on technology advancements in 2014, launching a landmark SDN platform in February and adding NFV features in July, radically changing the way it can provision and manage its network services. The developments landed the company the Global Carrier Award 2014 for Best Asian carrier.

This shares clear synergy with Telstra’s activities in 2014, which has seen the company impressively build on its cloud strategy, launching a global cloud unified communications service in August. It has also made notable moves to support its enterprise services outside of the region, by extending its network capabilities in both Europe and the US.

“Our strategy is centred on serving enterprise and carrier customers doing business in Asia. We serve these customers by leveraging our strong connectivity foundation to offer a portfolio of integrated network applications and services solutions,” said Thodey.

The $697 million transaction – which includes gross debt of about $400 million – is expected to be completed by mid-2015, subject to regulatory and Pacnet financier approvals.

Last week it was revealed that Telstra was in talks to acquire the Singapore and Hong Kong-headquartered Pacnet. This is Telstra’s largest deal to date.   

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