Southern Cross NEXT cable green-lit for development

Southern Cross NEXT cable green-lit for development

04 October 2019 | Natalie Bannerman

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Southern Cross Cable Network (SCCN) has officially announced construction of the Southern Cross NEXT subsea cable is due to begin shortly.

The company confirms that conditional agreements have now been signed and regulatory approvals have been obtained.

The news follows a separate announcement made last month by Alcatel Submarine Networks (ASN) CEO¸ Philippe Piron in a LinkedIn post where he confirmed that ASN was beginning construction of the $350 million submarine system.

Now, ASN been granted CIF to build the new high capacity cable, once complete, will be the lowest latency path from Australia and New Zealand to the US.

“The achievement of CIF is the result of a massive amount of effort by Southern Cross and the Sponsor teams over many months on the project,” said Laurie Miller, Southern Cross’ president and CEO. “The addition of the new Southern Cross NEXT route to the existing platform will provide existing and future customers with further resiliency and connectivity options between Australia, New Zealand and the United States. We are delighted to have successfully achieved this key milestone, and all focus will now turn to the timely implementation of the new system, and the continued development of product enhancements to meet our customers growing and changing requirements.”

The announcement also follows an agreement for Telstra to become a 25% shareholder in SCCN, joining existing shareholders Spark, Singtel and Verizon. The shareholders have agreed to release the necessary equity funding to enable Southern Cross NEXT to proceed with additional funding raised from debt and SCCN cash reserves. Although the deal is still subject to some conditions, these standard procedures and expected to be completed over the next few days.

“With 80% of all the internet traffic to Australia coming from the US, a high speed, low latency direct route to North America is a very important investment for our business and our customers,” said Michael Ebeid, group executive, Telstra Enterprise. "Southern Cross builds on our existing footprint across Asia Pacific where we carry 30% of the region’s active capacity. We are now even better placed to meet our customers' future data requirements right across Asia Pacific.”

Due for completion by January 2022, the new 13,483km, 72Tbps system will also provide critical international cable connectivity to the Pacific Islands of Fiji, Tokelau and Kiribati.

“The Southern Cross network provides critical connectivity between New Zealand and Australia, the Pacific Islands, and the USA,” added David Chalmers, Chief Financial Officer, Spark. “Southern Cross NEXT will ensure this network Cross can continue to provide that connectivity for the region, and meet our customers’ increasing data demands, for decades to come.”

It has also been developed as an extension of the existing Southern Cross two cable eco-system, allowing customers to use Southern Cross’ point-of-presence network and access infrastructure already in place. In addition, Southern Cross NEXT customers will be able to flexibly assign new and existing capacity across the three routes.

“Our investment in the Southern Cross NEXT cable is a timely reinforcement of our global network infrastructure. Together with the newly completed INDIGO submarine cable system, the enhanced Southern Cross cable ecosystem will be a new data superhighway connecting Southeast Asia to the United States, providing greater network diversity. The new cable system will enable Singtel and Optus to accelerate the roll-out of next-generation technologies that rely on low latency and high-bandwidth connectivity, reinforcing our position as one of the leading providers of international data services in the region,” continued Ooi Seng Keat, vice president of carrier services, group enterprise, Singtel.