Telstra buys submarine cable network operator Pacnet for US$697 million

Telstra Corp, Australia's biggest telecommunications company, is looking to expand its operations in China through its US$697 million acquisition of Pacnet, operator of Asia's largest privately owned submarine cable network.

The deal announced yesterday includes Hong Kong and Singapore-based Pacnet's interest in its mainland joint venture, PBS, which is licensed to operate a domestic internet protocol virtual private network and provide data centre services in most major provinces.

Privately held Pacnet's traditional customers are telecommunications network operators, multinational corporations and governments across the Asia-Pacific region. Since last year, the company has sharpened its focus on managed services and data centre operations.

Telstra chief executive David Thodey said the acquisition was a significant step for expanding the company's business beyond Australia.

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

"For Australian businesses, businesses across Asia and important companies looking to expand and grow in Asia, the combined entity will provide powerful new options for networks and services."