Telstra, PCCW complete Reach carve-up

Dylan Bushell-Embling
01 Mar 2011

Telstra and PCCW have revealed that they have completed the restructure of their subsea cable joint venture, Reach.

The operators have divided up the international assets owned by the 50/50 JV, leaving the remaining assets to be managed by Reach in Hong Kong.

The restructure, first announced in January, has given Telstra's international division direct control of subsea cable assets including the Reach North Asia Loop, Telstra said.

The company has also acquired control over more global backhaul systems and POPs, extra satellite and PSTN capacity and a Global Roaming Exchange platform.

Telstra International executive director of global sales Philip Mottram said the deal will allow Telstra International to achieve operational efficiencies, including by migrating the Reach international voice network to IP.

“This restructure will enable us to accelerate our new product development program...whilst streamlining processes,” he said.

Telstra has previously revealed it expected an accounting gain of up to A$150 million ($152.8 million) as a result of the split-up.

Reach has long been a drain on Telstra's deep pockets, with the operator's share of carried forward losses in the venture reaching A$596 million as of June 30 last year.

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