Australian telecommunications company Pipe Networks will begin a AUD 200 million project constructing an undersea cable system linking Sydney to Guam. Foundation customers include VSNL, Telikom PNG, Iinet, Internode and Primus Telecom. Pipe Networks did not disclose other domestic and international customer contracts citing confidentiality restrictions. The system is expected to be completed mid to late 2009.

The 6,900 km cable is referred to as PPC-1 (or Project Runway) and the main trunk of the system will be a 2-pair fibre cable capable of delivering 1.92 Tbps. The system will include branching units outside Sydney and the Gold Coast to allow the connection of future projects, along with a spur into Madang, Papua New Guinea. The company expects that the project will achieve positive cash recovery of the investment within three to five years. Furthermore, Pipe expects that the cable ownership vehicle is expected to be debt free within six months following commissioning of PPC-1 (scheduled for the second quarter of 2009).

The project will be structured through a number of new wholly-owned subsidiaries. These include Pipe International (Australia), which holds Australian based assets; PPC 1 (US), a Delaware corporation holding Guam landing station assets; and PPC 1, a Bermuda corporation owning international assets. The company has reconfirmed previous guidance for 2008 and 2009 of revenues for the full year to 30 June 2008 to total AUD 33 million to AUD 35 million with a net profit of AUD 7 million to AUD 7.4 million. The company''s board expects revenues in the 2008/09 financial year to be between AUD 44 million and AUD 46 million and net profit to eclipse AUD 10 million. While Project Runway is expected to have material impacts on profits beyond the 2009 financial year, there is no current expectation of material impact on previously issued forecasts, Pipe Networks said.


Source:Telecompaper

Tags:Cable