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Amcom buys Megaport's east coast fibre assets

Amcom will buy Megaport's Melbourne, Sydney, and Brisbane fibre assets in a deal worth AU$15 million.

Megaport's new fibre spin-off will lease back its own fibre assets on the east coast of Australia, after selling 180km of fibre across Sydney, Melbourne, and Brisbane to Amcom.

The agreement, in addition to a 15-year lease arrangement with Sydney network owner FirstPath, will give Amcom access to 17,000 buildings across Sydney, Melbourne, and Brisbane, with 200 buildings in Sydney immediately available.

"This strategic expansion program further leverages our existing 300-strong wholesale and channel partners, and provides us with last-mile data networks in the large markets of Melbourne, Sydney, and Brisbane. The beachhead acquisition of Megaport's fibre network and access agreement with FirstPath provides immediate capacity to accelerate our east coast growth," Amcom CEO Clive Stein said in a statement.

The network connects 30 datacentres, with 18 more on the way, and currently connects to 30 National Broadband Network (NBN) points of interconnect.

Amcom estimates that it will be able to service 5,000 new potential customers through the datacentres it is now connected to.

As part of the expansion, Amcom will be installing infrastructure in 30 exchanges, and will begin connecting customers in the first quarter of 2015.

It comes as last week, Megaport announced that its fibre business would be spun off into a new company known as Superloop to allow Megaport to focus on its core business of interconnectivity ahead of a global expansion.

Megaport founder Bevan Slattery said in a statement today that both Megaport and the spin-off company Superloop would have Indefeasible Right of Use for the fibre for 15 years, with the option of a 10-year extension.

"We have been working cooperatively for some time with Amcom towards a transaction that accelerates Amcom's east coast expansion strategy, but also provides Megaport and Superloop with long-term access to fibre infrastructure necessary for each company's development," he said in a statement.

Amcom said it would continue to look for more east coast acquisitions, but noted that consolidation in the industry had reduced the number of suitable target companies.

Amcom noted in the announcement to the Australian Securities Exchange that it is still in discussions with Vocus over the proposal to combine the two businesses , after Vocus took a 10 percent stake in its competitor.