SLATTERY'S TELSTRA WIN
Written on the 31 March 2016 by Laura Daquino
EVERY Aussie is craving fast and cheap internet, and Telstra's (ASX: TLS) heard the calls to now join forces with Bevan Slattery's SubPartners and Optus owner Singtel.
The three companies have entered into a Memorandum of Understanding (MOU) to build a 4500km two-fibre submarine cable that will connect Perth and Singapore, enhancing speed and connectivity between the regions.
It's estimated that around 95 per cent of information on the internet is currently carried by cables along the ocean floor.
Construction will begin on the APX-West cable route by the end of July 2016, scheduled for completion in 2018.
The landing point is NEXTDC's (ASX: NXT) Perth data centre, another company Slattery founded.
Brisbane-based Slattery (pictured) says the MOU is a 'major milestone' for the project.
All companies have agreed to purchase the entire available capacity on the system. Each pair in the two-fibre cable has a minimum design capacity of 10 terabits per second.
"The APX-West system is a consortium cable with all the major players having access to ownership economics at a fraction of the cost of private cable ownership," says Slattery.
"This is a unique commercial model for the Perth-Singapore route that will satisfy the ongoing bandwidth requirements of both network operators and internet content hosts."
Currently the data bridge between Singapore and Perth is being carried by the SEA-ME-WE 3 cable, as shown here.
Singapore-based Singtel's vice president of carrier services and group enterprise, Ooi Seng Keat, says APX-West will be a new data superhighway expanding connectivity and capacity, and providing the lowest latency from Australia to Southeast Asia, the Middle East and Europe.
Optus is wholly-owned by Singtel.
"Today Singtel has one of the most extensive submarine cable infrastructures in the Asia Pacific region," says Keat.
"With these capabilities, the Singtel Group, including Optus, can meet customers' growing data requirements for bandwidth-intensive applications such as unified communications, enterprise data exchange, internet TV and online gaming."
Slattery has previously labelled Singapore as the epicentre of Asia Pacific, when outlining the initial direction for his software company Megaport (ASX: MP1), which was launched around the same time as SubPartners.
"The big tip is, if you want to be the leading network and interconnection provider in Asia Pacific, then Australia shouldn't be the focus," Slattery said in 2013.
SubPartners was founded with the intention to construct undersea cable routes from Perth to Singapore labelled APX-West, another from Sydney to Los Angeles labelled APX-East, and APX-Central.
Cables are the size of a garden house, with software in a ship detecting the best path to lay these down depending on tension and current.
SubPartners doesn't actually own the fibre optic cable, with Slattery likening it to a property developer building an apartment block and selling off each space.
"It's a completely different model to what has been done before," said Slattery of SubPartners in 2013.
"Rather than selling circuit, we are selling spectrum. That way, if you own the spectrum, you aren't limited by future technology and can upgrade whenever you want."
Slattery has said there's more competition on the APX-East route - connecting Australia to the US - but he was always more than confident in his system's capability.
APX-East is poised for roll-out next.
"What we're doing is transformational. For the first time, people will be able to buy a terabit of capacity for a tenth of the price paid today," he says.
"We are providing access to infrastructure on a shared basis - which is remarkable considering the multi-jurisdictional aspect of the routes."
Slattery says consortia is always the challenge with these types of models, considering all parties involved in the route need to give approval for even a cable upgrade.
He says landing at the final destination of Hermosa Beach, California is the hardest part because approval is required by corporations including the NSA, CIA, FBI, Homeland Security, Defense and more.