Is Telstra setting its sights on Metronode?

Although a Nextgen buy would probably be blocked by Australia’s competition regulator, reports are emerging that Telstra has its eye on the Leighton-owned data centre operation, Metronode.

Leighton Holdings has its telecommunications assets on the block as it tries to put its balance book in better shape for the stock jocks.

According to the Australian Financial Review, the incumbent has lodged an information memorandum with Macquarie Capital, which is handling the sale.

The jewel in Leighton’s crown is the Nextgen inter-capital fibre network, one of only three that reaches Western Australia. It also touches Adelaide, Melbourne, Sydney and Brisbane, with a regional path that connects Australia’s AARNet research network to remote locations such as Narrabri in central NSW.

This, combined with Nextgen’s contract to build and operate the government’s Regional Backhaul Blackspots Program network – which ships fibre to outposts like Geraldton in Western Australia, Alice Springs and Darwin in the Northern Territory, Broken Hill in NSW, and several outback towns in Queensland – makes the network the sole long-haul competitor to Telstra in many places.

The data centre market, on the other hand, is more competitive, with all major carriers in the market, along with independent local and international operators. This would make a Telstra-Metronode buy something the ACCC is more likely to wave through. ®