Regional telecom providers, Pacific Internet and Asia Netcom, have announced a merger under the new Pacnet brand.
The combined company, which is based out of Hong Kong, maintains offices across the region. The deal brings together Pacific Internet's range of wholesale and retail IP services, including ADSL broadband and virtual private networks, and Asia Netcom's regional network infrastructure.
Pacific Internet's Australian managing director, Dennis Muscat, said Asia Netcom's history in the large enterprise and government market was synergistic with Pacific Internet's SMB and mid-market customer heritage.
"This will be a positive change - we'll be a bigger company with more in-depth market coverage. And with 170 staff around the country we'll be strong competition for the other telcos in the Australian market," Muscat said. "The Australian market is consolidating and you've got to be more competitive. This is an example where we are strengthened by having complementary businesses."
One of Pacnet's biggest assets is its EAC-C2C cable infrastructure which can carry up to 10.24TB of capacity and is valued at $US4 billion. The company has started upgrading its networks and also flagged plans for a new Trans-Pacific cable.
"Asia Netcom offers lots of transit capacity beyond what we could do in the past and gives us the ability to provide bigger pipes to major customers," Muscat said. "In the last 12 months there's been a big increase in bandwidth usage from all levels of the market including consumers. We can now launch products which allow customers to access and filter more bandwidth and understand how their capacity is being used.
"It also gives us bigger buying power - we hope that by being a key player we can improve relationships with major suppliers in country."
Muscat said Pacific Internet's existing channel partners will also benefit from better support and Pacnet's bigger bandwidth capacity. About 30 per cent of Pacific Internet's Australian business is derived from its 400 channel partners.
"We expect to invest in our channel management structure and programs to enhance that side of the business," he said. "Partners have the ground level relationships with the SMBs we have worked with for the last 6-7 years and we have tried not to compete with them. Asia Netcom has direct enterprise relationships, so there shouldn't be conflict in terms of our channel approach.
"We'll be able to expand the product range to make it more relevant to partners, particularly to those with customers in the larger corporate sector."
As part of the deal, Asia Netcom's local boss, Deborah Homewood, will become Pacnet's managing director for Australia and New Zealand, while Muscat will be given a role overseeing south Asia including ANZ, Thailand, Singapore, Malaysia and Indonesia. Further management changes will be announced later this month.