Purchase of additional capacity on Southern Cross Cable
Posted on February 19, 2015
Vocus Communications Limited (ASX: VOC) is pleased to announce that it has entered into a purchase program for additional capacity on the Southern Cross Cable, which connects Australia and New Zealand to the United States.
The program is to meet current as well as anticipated customer demand, and will increase Vocus’ existing capacity by close to 10 times when fully allocated, ensuring Vocus will continue to lead the market in meeting the rapid growth in Internet data demand.
Notably, in contrast to previous capacity purchases, capacity will be allocated and paid in annual instalments over a six year period from December 2015. The total cost of the purchase program is US$58.5 million, which Vocus intends to fund out of its cashflow and available facilities. Once allocated the capacity is for the life of the cable, currently to November 2030.
Vocus CEO, James Spenceley said: “The favourable structure of the new agreement means Vocus is no longer required to assume all capacity and financing upfront, thereby aligning the commitment and amortisation to expected utilisation.”
“This significant increase in capacity enables Vocus to continue to leverage the high growth in data demand from the wholesale and enterprise sectors. Given its redundant and protected nature, Southern Cross capacity has been a valuable asset and a key differentiator for Vocus, and this agreement ensures this will continue.”
For more information:
Chief Executive Officer
T: 02 8999 8999
About Vocus (ASX:VOC): Vocus Communications is an ASX listed leading telecommunications provider of Data Centre, Dark Fibre and International Internet connectivity across Australia, NZ, Singapore and the US. The company provides high performance, high availability and highly scalable communications solutions, which allow service providers to quickly and easily deploy new services for their own customer base.