Report: Telstra Mulling Pacnet Acquisition

Telstra, Australia’s largest telco, is in negotiations over a potential acquisition of Pacnet, which owns and operates and extensive submarine cable network in Asia Pacific and has a big data center services business in the region.

Cash-strapped Pacnet is after a $1 billion valuation, Bloomberg News reported, citing anonymous sources.

Pacnet acquisition would give Telstra the Hong Kong-based company's 19 data centers in 15 cities in India, Malaysia, Singapore, Hong Kong, China, Korea, Japan, and Australia. In October the company opened a 225,000 square foot data center in Tianjin, China.

The company’s submarine cable system in Asia connects Hong Kong, China, Korea, Japan, Taiwan, the Philippines, and Singapore. Pacnet also operates a trans-Pacific cable that links Japan and California.

The cable, called EAC Pacific, is part of Unity, a $300 million trans-Pacific cable system financed by Google, Bharti Airtel, Global Transit, KDDI Corp., and SingTel.

Telstra has been growing its enterprise cloud services business. The company provides private connectivity to Microsoft’s Azure cloud. Since November, it also offers VMware’s vCloud Air services out of its own data centers in Australia.