Data Center Finance: Telstra Acquires Pacnet

Australian telecommunications provider Telstra announced in late December that it is buying Pacnet, an Asian operator with an undersea fiber network and multiple Asia data centers.

Telstra is acquiring Pacnet in an effort to expand its business services and operations into the Asia Pacific region and increase its position in the enterprise market. The deal will cost Telstra $697 million.

“Asia is an important part of our growth strategy,” said Telstra chief executive David Thodey. “We believe this acquisition will help us become a leading provider of enterprise services to multinational companies and carriers in the region.”

Pacnet has offices in Singapore and Hong Kong and owns the EAC-C2C and EAC Pacific cables, a fiber optic network that stretches more than 29,000 miles. The company also operates more than 100 points of presence and two dozen data centers in the Asia Pacific region. Pacnet is also the only foreign organization licensed to offer data center services and a domestic Internet Protocol Virtual Private Network in most major Chinese provinces through a joint venture with PBS.

While Pacnet’s services will mostly be an addition to Telstra’s substantial existing international network operation, it is interested in adding more wide-area network ability to its offerings. Telstra recently passed its fixed line phone network business to a government-owned fiber operator, which leaves it with around $4 billion and an interest in diversification.

“The addition of Pacnet’s sub?-sea fiber network, data center assets, capability in China, and dedicated employee base to Telstra’s world-class infrastructure and management will give it the ability to accelerate business growth in the region,” said Pacnet chief executive Carl Grivner.

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