Singapore Telecommunications subsidiary Optus has acquired fibre-optic cable network operator Reef Networks in a deal valued at around AU$93 million.
Optus said acquiring Reef -- which owns a cable network between Brisbane and Cairns in Queensland -- gave the carrier exclusive use of the network's transmission capacity. The number two telco also expects to save more than AU$120 million in lease payments over the next six years.
Under the deal, Optus paid Reef's existing owners, Regional Telecommunications, Macquarie Global Infrastructure Fund 'A' and Macquarie Global Infrastructure Fund 'B,' AU$35 million in cash and assumed AU$58 million of Reef's bond financing obligations.
Reef Networks was originally formed in 1999. In 2001, Optus gained exclusive access to the fibre-optic cabling under a 10-year deal with Reef and Queensland Rail. The rail operator provided some shared access to its infrastructure for the cable network.
Bill Hope, Optus Networks' managing director, said the acquisition underpinned the carrier's strategy to extend network coverage and capacity while reducing reliance on other telcos.
It is understood if Optus chose to build its own cabling on expiry of its access deal in 2011, it faced projected costs of around AU$85 million.
Optus said the purchase followed the recently announced SmartNet initiative whereby the carrier installed fibre-optic networks in Cairns, Townsville and Rockhamption in North Queensland. It also expanded its existing network to deliver broadband services to more than 30 towns in the state.