Pacnet: Accelerating network expansion in Asia

11 October 2011 |


Over the last few years, Pacnet has been growing its already extensive infrastructure footprint, while strategically moving into the CDN space. Alex Hawkes finds out how those two halves combine to give the company a powerful foothold in the Asian market.

No other region on earth has such a rich mixture of developed and emerging markets as Asia. Whereas countries such as Singapore and Hong Kong have become globally recognised ICT hubs, the likes of Vietnam and the Philippines are relatively just embarking on their journey towards an advanced telecoms infrastructure. An extensive knowledge of all the region’s variables is therefore a requisite for Asian carriers, as is an ability to act fast and invest astutely.

Pacnet embodies many of the attributes of the modern Asian market. The company was formed in 2008 as the result of an operational merger and rebranding of Asia Netcom and Pacific Internet, in a move that has created one of Asia’s most extensive subsea cable infrastructures. It has since been carefully adding to its extensive footprint, while also moving strategically into the CDN space. A quick glance at Pacnet’s business activities over the last two years highlights the rapid pace at which it is pursuing its plans.

Cable connections

On the subsea cable front, the company last year launched EAC Pacific, as part of the Unity consortium, taking two of the cable system’s five fibre pairs. Linking Japan with the US, Pacnet connected EAC Pacific to its EAC-C2C network and in the process enhanced its connectivity between Asia and North America.

In April of this year, Pacnet also revealed plans for a $120 million high-speed network between Chennai, India and the US in collaboration with Bharti airtel. The deal saw the coming together of two of the region’s largest players, with Bharti’s i2i cable system and its domestic network in India connecting to Pacnet’s EAC-C2C and EAC Pacific submarine cable network.

As a backdrop to all this, the company is still pushing ahead with the planning of its West Asia Crossing (WAC) subsea cable, which will provide direct connectivity between India and Asia. The move is designed to help India meet its growing requirements for international bandwidth. WAC will have a design capacity of 6Tbps to 8Tbps and, according to Pacnet’s CEO Bill Barney, is now targeting a launch in the 2013–14 period.

“This year we embarked on the WAC cable project and also completed the fibre deal with bharti airtel, which has effectively allowed us to extend our network all the way from Singapore to Chennai. These have been major developments for us,” says Barney. “Our major initiatives on the capex front this year, however, have been the construction of our data centres. We have completed facilities in Australia, Singapore and Hong Kong, while we are in the process of building another in Hong Kong that will be completed in December of this year. This will give us four wholly owned data centres going forward.”

Content carriers

The construction of the data centres helped lay the foundations for the launch of the company’s next-generation content delivery network in mid-September. The service also leverages Pacnet’s regional subsea network and aims to enable businesses in Asia to seamlessly deliver high-definition videos and graphics as well as software and webpages worldwide.

“I think we are approaching the cloud a little bit differently from some of our competitors. We are coming at it from a network standpoint and our focus is around content delivery, largely because that’s what we know best,” says Barney. “We believe that video and software delivery are here to stay. Entering into the CDN space is not only playing where the internet is today, but also where it’s going in the next couple of years.”

Barney highlights that the company is tapping into a clear demand for delivering video that has only emerged as faster broadband speeds have infiltrated more and more parts of Asia: “Unlike Europe and the US, broadband speeds and penetration were traditionally fairly low in Asia with only a few exceptions in cities such as Seoul and Hong Kong. Up until the last three to four years, there was no ability to deliver video to the last mile in Asia, so there was no real need for CDNs. Obviously that’s now changed.”

The service is supported by technology from EdgeCast, a company that has created a firm name for itself in the US CDN space. The move marks the first time EdgeCast’s solutions have been implemented in Asia.

“We went in with a fairly open technology that not only allows us to interface with other CDNs around the world, but also enables us to grow and capitalise on the fact that we have enormous amounts of fibre in our network today,” says Barney. “EdgeCast’s solution gives us a lot of flexibility in terms of how we deploy the network and take advantage of our enormous fibre footprint. It’s a dense type network deployment as opposed to a many fingered approach, which is what a lot of our competitors use in the CDN space.”

This transition from a router-based platform towards a services-based model is where Barney sees high-speed networks developing in Asia over the coming years. Pacnet plans to roll the service out in Asia’s most developed markets first – namely Japan, Australia, Singapore and Hong Kong – before hitting all Asian capital cities in the next 17 months.

Monitoring markets

Exploring new markets in Asia has remained a priority for Pacnet and the company has a very firm plan of attack: “We will typically enter markets where we can get a regulatory foothold. This year, for example, has been about India, where we are now a fixed-line operator.

Achieving that would have been a difficult process up until two years ago, so we waited until we could get a decent return and enter the market in an aggressive way,” Barney explains. “We continue to look at entering markets in that fashion – looking for an opportunity where we can get a licence or if not finding a partner until we can.”

In terms of where’s next on the company’s radar, Barney identifies Indonesia and Vietnam as two potential markets for expansion. The company has grown its workforce in Indonesia during this year and added infrastructure into Jakarta, while in Vietnam it has introduced PoPs in the capital Hanoi and Ho Chi Minh City.

“There are smaller networks in these markets and right now is not about bringing the subsea cables into these countries. We are having discussions with various parties, but we haven’t found a business model that works for doing that just yet,” says Barney.

Just as the markets in Asia will continue to evolve, Barney sees the dynamic of Pacnet’s future revenues altering accordingly. “In 2002, our non-carrier business generated 14% of total revenues. Today, roughly 70% of our revenue is generated from new products and services,” says Barney. “In 10 years from now, I think that we will generate as much revenue from our data centres and our cloud capabilities as we do from our subsea cables. Our cables will still be critical and we will rembain a leader in that space but we will actually capture much more of the internet ecosystem, developing other ways of managing content on behalf of content producers and users.”


Key Facts: Pacnet


History: Pacnet was formed in 2008 as a result of the operational merger and rebranding of Asia Netcom and Pacific Internet.

CEO: Bill Barney

Network: Pacnet owns and operates EAC-C2C which is a 36,800km subsea cable network with a design capacity of 17.92Tbps to 30.72Tbps. It also owns EAC Pacific which spans 9,260km across the Pacific Ocean and delivers up to 1.92Tbps of capacity between Asia and North America.

Customers: Pacnet’s customers include some of the region’s largest carriers, including SingTel, Telstra and PCCW. It also claims to serve over 40% of Fortune 500 enterprises as well as other SMEs.

Services: The company offers IP-based solutions for carriers, large enterprises and SMEs, and delivers high-speed data hosting solutions through its network of data centres.