Australia's third largest broadband network provider, PowerTel, has sold a major chunk of its Sydney-to-Melbourne network to New Zealand-based broadband capacity provider Nava Networks, in a deal worth $230 million over 15 years.
Nava will use the capacity in the development of a multi-terabit system, Nava-1, linking Singapore, Jakarta, Perth, Adelaide, Melbourne and Sydney, and is due for completion in 2002 if funding is approved.
"This sale is a significant boost for our wholesale business," says Stephen Butler, PowerTel's CEO. "PowerTel is fortunate that it has a non-legacy scalable Sydney-to-Melbourne fibre link that is easily upgradable to suit Nava's needs."
As part of the agreement, PowerTel will provide a second, totally diverse Sydney-to-Melbourne fibre link, due to be complete and earning revenue by Q3 2002. This new link will fulfil Nava's diversity requirements and provide network diversity to PowerTel's customers.
PowerTel is commmited to purchasing capacity for 15 years on Nava's Melbourne-to-Singapore network, for $40 million plus operating and maintenance charges. PowerTel's major shareholder, Williams Communications, has similarly committed to purchasing $60 million-worth of capacity for its own use.
The additional capacity of the Nava-1 Melbourne-to-Singapore network will complement PowerTel's existing east-coast network and its international link to Williams Communications' 45,000 kilometre fibre-optic US network. It will provide PowerTel with end-to-end broadband network coverage to Adelaide and Perth, as well as access to the wholesale and corporate markets in South East Asia.