Australia’s Telstra has arranged to acquire a 25% stake in the Southern Cross Cable Network (SCCN), and become an anchor customer for the new Southern Cross NEXT cable.
The company has entered an agreement with SCCN shareholders Spark New Zealand, Singtel and Verizon Business to acquire a 25% stake in SCCN and substantial capacity on both the existing Southern Cross Cable (SXC) and the Southern Cross NEXT extension.
Southern Cross NEXT will be a high-capacity express route offering data center connectivity between Sydney in Australia, Auckland in New Zealand and Los Angeles in the US. Once complete, the cable will be the lowest latency path from Australia and New Zealand to the US.
The 12,250km cable system is expected to cost around $300 million, and carry 72Tbps of traffic. The cable is scheduled for completion by the end of 2020.
The cable is being designed as an extension of the existing SXC cable, a triple ring cable linking multiple sites in Australia, New Zealand and the US.
Telstra’s stake purchase and additional capacity purchase are both interdependent, and will be contingent on regulatory approvals.
“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% 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.”