Tuesday, 23 December 2014 10:49

AUDIO: Telstra gobbles up Pacnet, gets AsiaPac power-up (UPDATED) Featured

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Telstra has gobbled up telco services provider Pacnet, which provides connectivity, data centre and managed services to carriers, multinational corporations and governments in the Asia-Pacific.

Australia’s biggest telco, Telstra, is getting bigger with the acquisition of Singapore and Hong Kong headquartered Pacnet Ltd.

The deal includes interests in Pacnet’s China joint venture, PBS which ‘is licensed to operate a domestic Internet Protocol Virtual Private Network and provide data centre services in most major provinces in China.’

The deal transforms Telstra into an even bigger Asia Pacific telco powerhouse than it already is, with Telstra now taking ‘ownership of an extensive range of services including software defined networking, an expanded data centre network, more submarine cables and major customers across the region.’

UPDATE: iTWire tuned in to Telstra's media briefing call on its acquisition of Pacnet, featuring Telstra CFO and Group Executive International, Andrew Penn, and Brendon Riley, Group Executive, Global Enterprise and Services.

After a brief introduction, a series of questions were asked by analysts and media representatives.

As this was a phone conference there is no video, it is audio only and embedded directly below.

Indeed, with the year ended December 2013 seeing Pacnet generate revenues of US$472m and earnings before interest, tax, depreciation and amortisation (EBITDA) of US$111m, we’re told that ‘the combined entity would become a leader in the Asia service provider market.’

We also told that ‘Telstra’s GES business (Global Enterprise and Services) in Asia would almost double in size and it is expected to drive operational and cost synergies.’

At well over three quarters of a billion Australian dollars, the US $697 million acquisition ‘is subject to completion adjustments,’ with the transaction ‘subject to regulatory and Pacnet financier approvals’. It is expected to complete by mid-2015.

Telstra CEO, David Thodey, also known as ‘TelstraMan’ and perhaps now ‘Pacman’, too, noted ‘the acquisition was aligned to Telstra’s growth strategy and was a significant step for Telstra as it continued to expand the business beyond Australia.’

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

“The enterprise services market is evolving rapidly and Pacnet will strengthen our networks; data centres and submarine network as well as boosting our service offerings and people capabilities.

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

“Pacnet increases the scale and scope of our assets which can be used as a platform for Telstra to scale and expand leading solutions such as unified cloud, unified communications, managed network services and security services.

“Our strategy is centred on serving enterprise and carrier customers doing business in Asia. We serve these customers by leveraging our strong connectivity foundation to offer a portfolio of integrated network applications and services solutions,” concluded Telstraman Thodey.

Pacnet CEO, Carl Grivner was presumably the grinner when he said: "The addition of Pacnet’s subsea fibre network, data centre 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.

“There is a tremendous opportunity for this combination to address the growing demand for services throughout the Asia-Pacific region and provide superior solutions and service to customers.”

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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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