Vocus Communications and Spark New Zealand will be equally represented on the Connect 8 board and receive equal distributions of profits. Photo / Greg Bowker
Vocus Communications and Spark New Zealand will be equally represented on the Connect 8 board and receive equal distributions of profits. Photo / Greg Bowker
Vocus Communications, the Australian fibre network and data centre company, has agreed with Spark New Zealand to form a new construction joint venture, Connect 8.
Under the deal, Spark will acquire half of Connect 8 for an upfront cash payment and an agreed level of annual construction spending while Vocuswill also put up an agreed level of annual construction spending. The amounts were not disclosed.
After an initial start-up period, Connect 8 was expected to have an annual committed revenue pipeline of $15 million to $17 million and would continue to build fibre and telecommunications assets for Vocus, Spark New Zealand and other New Zealand clients, said a Vocus statement to the ASX yesterday.
Spark chief operating officer David Havercroft said the joint venture put Spark in an even better position to help New Zealand businesses navigate a future in which fibre would become increasingly important.
"Spark New Zealand already has 8000km of fibre cable in New Zealand. This, paired with the Optical Transmission Network [OTN] - the core data transport network - connects more cities, exchanges and data centres than any other network provider in the country, " he said.
ASX-listed Vocus describes itself as the leading independent provider of wholesale and telecommunication services in Australia and New Zealand, providing internet, fibre and ethernet, and data centre services.
Vocus chief executive James Spencely said the joint venture and its committed pipeline would help smooth out earnings volatility from its construction division.
The division was acquired as part of its $115 million purchase last year of fibre-line provider FX Networks, which owns a national 4132km inter-city fibre internet network.
