A new undersea cable to create a high speed data link between Australia to Singapore

Suhaimi Abdullah/Getty Images

Vocus and Nextgen are working on building a high speed communication cable between Australia and Singapore.

The two are in the middle of due diligence on the project which will cost about $US120 million ($A170 million) and take 18 months to build.

Vocus and Nextgen will form a 50/50 joint venture to build the 4,600 km cable connecting Australia to Singapore and Indonesia.

The project, which is due to start early in 2016, would bring the first 100 Gbit/second high-speed connection from Australia to South-East Asia. There are already five undersea cables between Australia and Singapore.

“The project will be funded using a mix of cash, project debt and customer pre-sales,” says Vocus CEO James Spenceley.

“The proposal remains subject to certain conditions, including completion of due diligence and regulatory approval, which are expected to be formalised in coming months.”

Nextgen CEO David Yuile says Vocus is an ideal partner because the company already has capacity on several existing international cables.

“Our new cable will provide a high-speed, low latency path to Singapore and Jakarta, both key growth markets and IT centres,” he says.

“It will also be very beneficial for the WA economy, particularly the resource sector, providing direct connectivity to the Asia Pacific region.

“In a broader context, the project is important nationally as it will add value to available telecommunications.”

Nextgen has already committed millions of dollars in the WA region with construction on its $US150 million North West Cable submarine project, connecting off-shore platforms in the Browse, Canarvon and Bonaparte Basins from Port Hedland to Darwin.

Undersea cables carry most of the world’s internet and voice traffic.

Vocus and M2 recently agreed to merge, creating a combined local telco with $1.8 billion in revenue. The market capitalisation will be more than $3 billion, putting it within the S&P/ASX 100 club of companies.

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