PE-Backed Pacnet To Construct Australia-US cable

(Reuters) – Pacnet, operator of an Asia-wide undersea cable network, and Australia’s Pacific Fibre said on Wednesday they plan to construct a $400 million fibre optic cable connecting the United States and Australia.

The 13,600 km (8,451 mile) cable would connect Sydney and Auckland with the United States and was expected to be ready for service in 2013, the companies said in a joint statement.

The 50:50 partnership is designed to take advantage of rising broadband penetration and access speeds in Australia and New Zealand which are looking at deploying national broadband networks.

“This investment is also an integral part of our overall strategy to expand our subsea cable infrastructure into the Australasia region,” Pacnet chief executive Bill Barney told reporters.

Barney said the company was still waiting for financial markets to recover before making an initial public offering, most likely on the Nasdaq.

“When markets recover we will go public,” he said, adding this could take six to nine months.

He also told reporters his company had no plans to bid for AAPT, the Australian subsidiary of New Zealand’s Telecom Corp (TEL.NZ), although it had looked at the target twice.

Telecom Corp is in negotiations to sell the business to TPG Telecom (TPM.AX) for about $400 million, a source has previously told Reuters.

Pacnet’s current stakeholders are a group of private equity firms, led by Ashmore Investment and Spinnaker Capital. Pacnet is spending hundreds of millions of dollars to build a data centre in Asia in partnership with other major network users.

The push into data centres and away from its roots as the operator of an Asia-based undersea cable network build in the late 1990s comes amid rapidly rising demand for applications like video-on-demand. (Reporting by Michael Smith; Editing by Ed Davies)