Internet service provider iiNet Ltd announced today that it entered a 15 year international capacity agreement with Pipe International Pty Ltd as a foundation customer of the PPC-1, an undersea cable linking Australia to Guam's communications hub.
Internet service provider iiNet Ltd announced today that it entered a 15 year international capacity agreement with Pipe International Pty Ltd as a foundation customer of the PPC-1; an undersea cable linking Australia to Guam's communications hub.
Queensland-based Pipe will be constructing a $200 million cable from Australia to Guam expected to be complete in the mid to late 2009, this will then join existing cable systems to provide connectivity to Asia, United States and
Europe.
Representing a significant enhancement to Australia's international broadband capacity, the main trunk of the PPC-1 system will be a 2-pair fibre cable capable of delivering 1.92 Terabits of data per second.
The other foundation customers who can be identified at this time include VSNL, Telikom PNG, Internode and Primus.
"This is a significant announcement for all Australian Internet users," said iiNet Managing Director, Michael
Malone. "iiNet has been saying for years that the bottle neck in Internet access in this country is in the
international links, not in the access network. This project signals the first entirely new cable delivered to
Australia in eight years and will deliver more capacity for bandwidth starved Australians."
iiNet and Pipe previously entered into a strategic arrangement for the construction of a dark
fibre network in 2006, delivering high capacity links to suburban areas in Sydney, Melbourne and Brisbane.
Full announcement pasted below:
iiNet Limited (ASX:iin) announced today that it has entered into a 15 year international capacity agreement
as a foundation customer with Pipe International Pty Ltd, a 100% subsidiary of Pipe Networks Limited
(ASX:pwk).
iiNet and Pipe previously entered into a strategic arrangement for the construction of a dark
fibre network in 2006, delivering high capacity links to suburban areas in Sydney, Melbourne and Brisbane.
Managing Director, Michael Malone said "this agreement will provide iiNet with long term supply certainty
and significant cost savings".
In previous investor presentations in 2007, iiNet indicated that it has been investigating its options to secure
a long term supply agreement for international capacity. This agreement with Pipe achieves that objective.
Pipe will be constructing a new cable from Australia to Guam which is expected to be complete in the mid to
late 2009, this will then join existing cable systems to provide connectivity to Asia, United States and
Europe.
This solution provides ample capacity to match iiNet's plans for growth and is considered a key
plank in the Company's ability to continue delivering affordable high speed broadband to our customers.
International capacity currently represents approximately 15% of iiNet's cost of sales and upon switching to
this service it will provide a significant saving for iiNet in international bandwidth costs as well as providing
iiNet with greater certainty over the services it delivers.
iiNet has also put in place contingency plans with existing providers which gives the Company flexibility and
certainty of supply until the new capacity comes online in approximately eighteen months.
"This is a significant announcement for all Australian Internet users," said iiNet Managing Director, Michael
Malone. "iiNet has been saying for years that the bottle neck in Internet access in this country is in the
international links, not in the access network. This project signals the first entirely new cable delivered to
Australia in eight years and will deliver more capacity for bandwidth starved Australians."
