SingTel vies for $140m cable

Optus parent company Singapore Telecom (SingTel) is one of two private sector groups currently developing plans for a $140 million sub-sea communications cable linking Perth with Asia.

The second proposal is backed by a West Perth start-up company, Ochre Networks.

The bids reflect growing recognition of the need for such infrastructure, and is confirmed in a report by the ICT Industry Development Forum.

However, the report doubts either proposal will succeed.

Ochre managing director Barry Padman previously worked with Shield Equities subsidiary Layer 2 Communications, which was involved in an ambitious plan in the late 1990s to build a global cable network called Project Oxygen.

He told WA Business News he has been working “on and off” on the new cable project since Layer 2 went into administration in 2001 and is currently trying to lock-in funding.

SingTel is more advanced, having called tenders in July 2005, but the report, titled Big Pipes: Connecting Western Australia to the Global Knowledge Economy, said there was no certainty its proposal would materialise.

“In both cases, investment plans for new cables are threatened by the potential for inexpensive upgrades of existing cables,” the report concluded.

While upgrades would appear to be a good outcome, the report said the two existing cables would still be unsatisfactory because their complex ownership resulted in little competition.

“Worse still, the direct links to Asia from WA are expensive to commercial users and researchers cannot get the same bandwidth as they can on the east coast.”

It noted that only one quarter of the 45 gigabit capacity is utilised on the two existing cables.

The report, launched this week by Science and Innovation Minister Fran Logan, concluded the state government should “expedite” the provision of new cable capacity if the private sector proposals did not develop.

ICT Industry Development Forum chairman and former Labor government minister Mal Bryce said advances in ‘big science’ and big business are contingent on improved network capacity.

“This report demonstrates that current infrastructure and governance structures are unlikely to meet planned demand for ‘big science’ let alone the increasing demand of big business,” he said.

In the science field, the report identified several developments in WA that could utilise improved cable links.

These include the $20 million xNTD radio telescope, which is proceeding, and the $1 billion-plus square kilometre array radio telescope, for which Australia is competing against three other countries.

The report also notes the benefits that could flow to academic researchers and business users of the super-computers established by ISA Technologies and iVEC at Technology Park in Bentley.

The report acknowledged that WA users have access to “abundant and competitively priced capacity” to cables that run via Sydney and across the Pacific.

However, it asserts that WA should have direct international links to Singapore, which is a regional hub providing links to the growth economies of China and India.

“The case is based on continuing rapid growth in demand, the need for effective competition in west coast international capacity, the shift in the balance of power in the global economy to Asia and national security,” the report concluded.