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Pacnet becomes 'potential' prey for Australia's Telstra

Oh great. Dominant telco from five eyes member bidding to buy US-to-Asia cables

Australia's dominant telecommunications company, Telstra, has told the nation's stock exchange “that it is in discussions with the owners of Pacnet around a potential transaction to acquire the company.”

The announcement of the exploration is so brief it reads a lot like it's a tick-the-boxes reveal under the continuous disclosure laws in Australia that require businesses to keep the market informed.

If Telstra does indeed acquire Pacnet, it'll make for interesting times. The company operates submarine cables connecting Hong Kong, China, Korea, Japan, Taiwan, the Philippines and Singapore, plus a cable from Japan to the USA.

It's also a data centre operator. Of late, the company has cooked up home-brewed software-defined-networking to allow the creation of short-lived circuits that flow over its cables, or others, to link bit barns. That's a useful trick as business starts to do more dynamic things in the cloud, or when it's time to spaff something out onto a content delivery network. Pacnet's got one of those, too, and is also an Amazon Web Services direct connect provider.

There's no word on what Telstra will pay, but the company is known to be keen on expansion into Asia as its domestic base just isn't growing that quickly. Pacnet could give Telstra new markets and new businesses to pursue.

Telstra's Australian home may concern to the many nations Pacnet touches, as Australia is a member of the five eyes intelligence alliance. The potential for taps to submarine cables may well worry governments asked to sign off on the deal. ®

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