Vocus Communications and Nextgen Networks have signed 50-50 joint venture to build the Australian Singapore Cable, a deal valued around $120 million (AU$170 million).
Vocus has confirmed that the 4,600-kilometre ASC will connect Australia to Singapore and Indonesia. The company claimed it will be the first 100 gigabit per second high-seed connection from Australia to Southeast Asia.
Following finalisation of regulatory approvals, completion of due diligence, and other conditions, the project is scheduled to begin construction in early 2016 and will take approximately 18 months to complete.
Vocus said the project will be funded using a mix of cash, project debt, and customer pre-sales.
In September, Vocus and M2 announced their intentions to merge and form the fourth-largest telecommunications provider in Australia, and the third-largest in New Zealand, with the companies claiming that the combined entity would be worth more than AU$3 billion.
Under the proposed merger, it would occur via an M2 scheme of arrangement where the merger would be scrip based, wherein M2 shareholders will be given 1.625 shares per M2 shares.
The merger is awaiting approval by M2 shareholders, which is expected to take place in early 2016. The Australian Competition and Consumer Commission (ACCC) would thereafter also have to approve the deal before the scheme can take place.
Vocus announced in August a full-year FY15 revenue increase of 62 percent to AU$149.8 million, EBITDA up 56 percent to AU$51.6 million, and a net profit after tax up 34 percent, to AU$18.1 million.
Nextgen mid-last year inked a $100 million deal with Alcatel-Lucent as well as Shell and Inpex to build a 2000-kilometre undersea fibre-optic cable system between Darwin and Port Headland.
The system is expected to provide high-speed data and voice communications for Inpex's Ichthys liquefied natural gas project and Shell's Prelude floating liquefied natural gas project, both located in the Browse Basin off the north-west Australian coast.