Telstra has signed a memorandum of understanding with Bevan Slattery and Ted Pretty's new venture SubPartners for capacity on its new Perth to Singapore subsea cable.
Slattery and Pretty, who are both board members for datacentre company NextDC, started SubPartners last year, looking to build a new subsea cable between Perth and Singapore.
The cable, named APX West, will be 4,600km long, with 4 fibre pairs, 55 repeaters, between 48 and 60 wavelengths per pair and 100 gigabit-per-second capacity per wavelength. It will have interconnect points in NextDC's P1 Perth datacentre and Sydney S1 datacentre, as well as in Jakarta, Indonesia, and in Singapore. The company expects the cable to be ready for service by the fourth quarter of 2014
Telstra's managing director of global, Martijn Blanken, said that the APX West cable would be instrumental in meeting the transmission needs for multinational companies in the Asia-Pacific region.
"Our commitment to developing the APX West cable is in line with our long-term strategic plan to grow further and deepen our Asia-Pacific network capability," he said.
Slattery told ZDNet that the company's focus has been to get the major cornerstone providers on board. He said that SubPartners is in discussion with a number of other providers and it is expected that more will sign on in the next 60 days.
SubPartners approach to market is much different to the traditional cable provider, in that rather than leasing capacity on the cable, the company is selling portions of the fibre pairs, meaning upgrades to capacity over those pairs benefits the owners immediately.
"The business model we're going in with — spectrum ownership — is striking resonance with a lot of providers, both domestic and international," he said.
"If they're given the option, that's the option they prefer. They own that spectrum, and as bandwidth increases, they can change the equipment on the end themselves and get substantial capacity increases."
Slattery said that the pricing isn't too dissimilar to the pricing for 100Gbps or 200Gbps on an existing cable, but the owners of that capacity stood to gain more in the longer term.
"You've got that security of ownership and that absolute certainty of upgradeability for almost a co-owner price. It's a fairly fundamental shift in how international capacity and international connectivity is delivering in Australia and Asia."
Industry journal CommsDay reported in January that the cable was expected to cost between US$180 million and US$200 million.
A second cable, called APX East, is planned to run from Sydney to Hermosa Beach in California via Auckland in New Zealand and Oahu in Hawaii. The 12,500km cable will have 4 fibre pairs with 140 repeaters and 48 wavelengths per pair, with a total system capacity of 19.2 terabits-per-second. The cable is expected to cost between US$270 million and US$300 million, and will be launched in the first quarter of 2015.