Indigo subsea cable construction locked in with Alcatel contract

Alcatel Submarine Networks has entered a system supply agreement with the Indigo subsea cable consortium, ensuring the construction, supply, and operation of the cable is now binding.
Written by Corinne Reichert, Contributor

The construction of Asia-Pacific fibre infrastructure company Superloop's Indigo subsea cable system has reached a contractually binding status following Alcatel Submarine Networks entering a system supply agreement.

The agreement makes the submarine cable system supply and construction binding for all parties, as well as the process of bringing it into operation.

The contract was executed between Alcatel Submarine Networks and the Indigo consortium parties including Superloop and submarine cable construction company SubPartners, along with Google, Telstra, Singtel, AARNet, and Indosat Ooredoo.

The Indigo subsea cable system, announced earlier this month, will connect Sydney, Perth, Singapore, and Jakarta. The cable system will span around 9,000km, with two fibre pairs and a design capacity of 18Tbps, and is expected to be completed by mid-2019.

Australian technology entrepreneur Bevan Slattery, who is the founder and CEO of both Superloop and SubPartners, said the subsea cables would connect with Superloop's existing metro fibre networks. Once the Indigo cable system is complete, Superloop will have access to 4.5Tbps-capacity fibre, which it will be able to increase over time.

Following the announcement of Indigo construction, Superloop also announced that it would be acquiring SubPartners for $2.5 million via the issue of 1,451,869 fully paid ordinary shares in Superloop at an issue price of $2.255 per share.

According to Superloop, the acquisition will provide it with important APAC submarine cable capacity and assets across the region, including Indigo.

As part of the acquisition, Superloop has guaranteed SubPartners' construction capital, operating, and maintenance commitments in relation to the Indigo subsea cable, which involves a total capex of around $35 million to $37 million out to FY20.

"SubPartners is also responsible for the procurement, provision, operation, and maintenance of the shore end infrastructure for Indigo Central in Sydney, and will receive fees of approximately $5.3 million from the Indigo consortium over FY17 and FY18," Superloop added.


(Image: Screenshot by Corinne Reichert/ZDNet)

SubPartners, founded by Slattery in 2012, was formed with the aim of building a subsea cable connecting the west coast of Australia with Singapore. According to Slattery, the cost of operating the cable has been reduced significantly by the sharing of ownership between the parties.

SubPartners is also constructing the APX-West Perth to Singapore subsea cable with Telstra and Singtel, which will be 4,500km long with two fibre pairs providing a minimum of 10Tbps capacity each pair and two-way data transmission, and is expected to be completed by 2018.

Superloop, meanwhile, recently completed construction of its 1,728 fibre core Hong Kong subsea cable TKO Express, which connects Chai Wan on Hong Kong Island and Tseung Kwan O (TKO) Industrial Estate -- Hong Kong's new major hub for technology, datacentre, financial, and media companies, as well as submarine cable landing stations -- on the mainland.

In addition, Alcatel Submarine Networks -- now a division of Nokia -- also recently reached a final agreement with Vocus Communications on the design and technical specifications of its own subsea cable system, the Australia Singapore Cable (ASC).

Originally a 50-50 joint-venture deal between Vocus and Nextgen Networks, the 4,600km ASC will connect Perth with Singapore and Indonesia, with completion set for August 2018 at a cost of $170 million. A deal signed between Vocus and Nextgen Networks in November 2015 pinned the cost of the cable at around $120 million.

Vocus subsequently purchased Nextgen Networks for AU$700 million in June last year, with Vocus and Alcatel-Lucent Submarine Networks in December signing an agreement to build the ASC.

The cable comprises a four-pair fibre system with a minimum total capacity of 40Tbps; the option to connect the system to Vocus' cable landing station in Port Hedland, Western Australia, in future; and a branch providing 150x100Gbps per fibre pair between Singapore and Indonesia.

Alcatel Submarine Networks also activated the Vocus-owned North West Cable System with Nextgen Group in September last year. The $139 million 2,100km fibre-optic submarine cable connects Darwin and Port Hedland, and was integrated into Nextgen's 17,000km land-based transmission network and Metronode's datacentres across Australia, also connecting to offshore oil and gas facilities.

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