Telstra goes for Chinese takeaway with Pacnet buy

AUD$697m buys Australian carrier bit barns and subsea cables across Asia

As foreshadowed last week, Australia's dominant telco, Telstra, will acquire Pacnet.

Pacnet is perhaps easiest to understand as a mini-Equinix that also owns its own submarine cables, so offers carriage services and interconnection between bit barns. Those assets have led it to create a sofwtare-defined (wide-ish-area) networking product in the hope it can make it easier for cloud users to build robust and/or elastic connections across the region. The company is also joint operator of a Chinese venture called PBS that is “licensed to operate a domestic Internet Protocol Virtual Private Network and provide data centre services in most major provinces in China.” With Chinese cities moving to online service delivery at pace, and building private clouds to make it happen, there's lots of upside there.

And of course it's a rare day on which submarine cable owners get to twiddle their thumbs, especially when those cables connect the world's most populous continent – Asia – to the USA and its riches of content and middle-class clickers.

The US$697 million acquisition is “subject to completion adjustments” but signatures are expected to complete by mid-2015.

Telstra CEO David Thodey's canned quote says the buy give his company the chance to “become a leading provider of enterprise services to multinational companies and carriers in the region” and to scale “unified cloud, unified communications, managed network services and security services.”

Pacnet's welcoming its new Australian overlords with appropriate tact.

Telstra won't have things its own way in the region: IBM's SoftLayer cloud operation today announced it's flicked the switch on a Tokyo bit barn. ®

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