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NTT Splashes on Subsea Assets

Japanese giant buys transpacific cable operator for more than $100 million and joins pan-Asia/Pacific subsea cable consortium

May 26, 2009

2 Min Read
NTT Splashes on Subsea Assets

NTT Communications Corp. (NYSE: NTT) signaled its intentions to play a more significant role in the subsea capacity market this week with a deal to buy Pacific Crossing Ltd. and news of its involvement in a pan-Asia/Pacific submarine network development.

The acquisition, valued by NTT at more than ¥10 billion (US$106 million), will give the Japanese carrier greater control over the reliability of its transpacific links, and enable it to better meet its capacity needs, NTT noted.

NTT is already a tenant on Pacific Crossing's PC-1 21,000-kilometers network, which has two landing points in Japan, at Ajigaura (near Tokyo) and Shima (near Osaka and Nagoya), and two on the west coast of the U.S. at Harbour Pointe, Wash., and Grover Beach, Calif. (near Pismo Beach). The network, a self-healing DWDM ring, has an aggregate capacity of 3.2 Tbit/s. (See Pacific Crossing Offers GigE and PC-1 Upgrade Complete.)

NTT is believed to have beaten out a rival bid from regional subsea network operator Pacnet to buy Pacific Crossing from its consortium of private owners, the largest of which is Strategic Value Master Fund Ltd.

PC-1 isn't NTT's only transpacific cable interest, though: In March 2008 it joined the consortium of Asian and North American carriers that built the recently completed Trans-Pacific Express. (See AT&T, NTT Join Subsea Consortium and Carriers Plan $500M Transpacific Link.)

Other transpacific networks include: the Trans-Pacific Network (TGN-P), operated by Tata Communications Ltd. 's VSNL, which runs multiple subsea cables; the Asia-America Gateway (AAG), which is due to start carrying traffic by the end of next month; and Unity, the new cable backed by a consortium including Google (Nasdaq: GOOG) that is due to go live in 2010. (See VSNL Boosts Trans-Pacific Cable, VSNL Boosts Asia Subsea Capacity, Carriers to Connect China With $500M Cable, and Carriers Plan $500M Transpacific Link.)

NTT also announced today that it has joined a consortium of Asian operators that will build a new regional subsea cable called the Asia-Pacific Gateway (APG), which will span 8,000 km and have a maximum capacity of 4 Tbit/s.

The new network, which is due to go live in 2011, will link China, Hong Kong, Japan, South Korea, Malaysia, Taiwan, the Philippines, Singapore, Thailand, and Vietnam. Other carriers in the consortium include China Telecom Corp. Ltd. (NYSE: CHA), China Unicom Ltd. (NYSE: CHU), Chunghwa Telecom Co. Ltd. (NYSE: CHT), KT Corp. , Philippine Long Distance Telephone Co. (PLDT) , Telekom Malaysia Bhd. , and Vietnam Posts and Telecommunications Corp.

— Ray Le Maistre, International News Editor, Light Reading

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