Telstra buys 25 percent stake in trans-Pacific Southern Cross Cable

Telstra has bought into a trans-Pacific network of cables connecting Sydney and California.

The telco bought a 25 percent stake in Southern Cross Cable Network (SCCN), the owner and operator of the Southern Cross Cable, joining Spark New Zealand, Singtel and Verizon Business as partners.

As part of the deal, Telstra also added its capacity on the existing network and the under-construction Southern Cross NEXT subsea cable.

The Southern Cross Cable is a network 28,900 km of submarine and 1600 km of terrestrial fibre optic cables spanning from Sydney to Morro Bay in California. The 12,250 km NEXT cable meanwhile is a high-capacity express route providing data centre connectivity scheduled for completion by 2020.

“Telstra has long been a key customer of Southern Cross and this investment will mean Telstra has an immediate ownership interest in the existing Southern Cross network, as well as in Southern Cross NEXT,” Telstra group executive for enterprise Michael Ebeid said.

“This route is extremely important to our business as US to Australia traffic accounts for more than 80 per cent of all the internet traffic to Australia. Southern Cross builds on Telstra’s existing footprint in Asia Pacific and creates a critical new path for ‘Australia In’ and ‘Australia Out’ connectivity.”

Telstra said the NEXT cable is expected to cost about US$300 million (A$417 million) and is designed to carry 72 terabits of traffic.

It added that services offered on the new system will be an extension and integration of the services offered across the current Southern Cross platform.

“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 to the US via Los Angeles,” Southern Cross Cables president Anthony Briscoe said.

“We are delighted that Telstra has committed to the cable as an anchor customer, and more so that Telstra sees the value in our capability long-term and is set to take a stake in the company.”