Australian telco Telstra is in talks with a view to buying the Asia-Pacific undersea cable operator Pacnet for an estimated $1 billion. Insiders have told Datacenter Dynamics the deal is almost complete.

More cable could be useful, as a fault on the SEA-ME-WE 3 undersea cable caused chaos to Australia’s service providers earlier in December. As Australia’s largest telco, Telstra will want to guard against any repetition - and Pacnet owns some 46,000 km of undersea cable.

Telstra has confirmed the discussions, which we first heard rumours of in November. After reports in Bloomberg, the talks were confirmed in a statement to the Australian Stock Exchange by Telstra company secretary Damien Coleman (reported by the Sydney Morning Herald): “Telstra confirms that it is in discussions with the owners of Pacnet around a potential transaction to acquire the company.”

Telstra is in transition right now. Having been a state-owned monopoly phone company, it is now transferring its fixed-line network to government owned fiber operator NBN.

Pacnet is based in Singapore, and is owned by finance companies including Spinnaker Capital and Ashmore Investment Management. As well as its cables it owns several major data centers in the region.

Pacnet’s network