Telstra buys capacity on AJC cable

14 Jul 2009

Australian incumbent Telstra, alongside other shareholders in the venture, has given a financial lifeline to international internet submarine cableco Australia Japan Cable (AJC), Australian IT reports. It is understood that AJC, which operates one of only three internet transmission routes to Australia, received approximately AUD150 million (USD116.9) from Telstra and the other investors; the funds were used to buy up capacity on AJC’s submarine cable as part of a debt restructuring plan formulated after creditors refused it an extension on its financial obligations due at the end of 2009. On the back of the announcement some concerns have been raised by industry observers that Telstra may be using its market position to protect AJC and thus artificially inflating international capacity beyond the reach of the country’s competition regulator. However, Robin Russell, AJC’s CEO, argued that it was not unusual to sell capacity to shareholders in the telecom sector.

Australia, Telstra (incl. Belong)