Update on Southern Cross Cables NEXT Project

Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand


MARKET RELEASE
18 December 2018

Update on Southern Cross Cables NEXT Project

Southern Cross Cable Network (Southern Cross) today confirmed an important milestone
for the planned Southern Cross NEXT project (SX NEXT), with Southern Cross shareholders
agreeing terms with Telstra to become one of the anchor customers of SX NEXT and a
new shareholder in Southern Cross.
The agreed terms are subject to definitive documentation and regulatory approvals. If
confirmed, Telstra is expected to become a 25 per cent shareholder in Southern Cross by
investing in new shares, resulting in Spark New Zealand’s shareholding being diluted to
approximately 37.5 per cent.
The funding arrangements for the SX NEXT project are yet to be finalised. Once these
are confirmed, Spark will update the market as appropriate on any related financial
impact.

A copy of the joint announcement by the Southern Cross shareholders and Telstra is
attached.

- ENDS –
For media queries, please contact:
Lucy Fullarton
Corporate Relations Partner
+64 (0) 21 070 6197

For investor relations queries, please contact:
Chante Mueller
Investor Relations Manager
+64 (0) 27 469 3062

Telstra to make equity investment in Southern Cross Cable
Network and acquire capacity on new Southern Cross NEXT Cable

Will join Spark New Zealand, Singtel and Verizon Business as partners in Trans-
Pacific subsea cable projects

Singapore, Sydney, Wellington, 18 December 2018 – Southern Cross Cable Network
(SCCN) and its shareholders, Spark New Zealand, Singtel and Verizon Business, are pleased
to announce that Telstra has entered into agreed terms to purchase a 25 per cent stake in
SCCN and substantial capacity on both the existing network and the new Southern Cross
NEXT subsea cable.
The share purchase and capacity purchase are inter-conditional, and both are subject to
definitive documentation and relevant regulatory approvals. SCCN owns and operates the
trans-Pacific Southern Cross Cable and has initiated work on the Southern Cross NEXT cable.
Southern Cross NEXT will be a high capacity express route, providing data-centre connectivity
between Sydney, Auckland, and Los Angeles and is scheduled for completion by end-2020.
Given its design and route, it will be the lowest latency path from Australia and New Zealand
to the United States.
The new 12,250 kilometre cable system has been developed as an extension of the existing
Southern Cross eco-system. It will allow customers to leverage Southern Cross’ extensive
point-of-presence network and access infrastructure already in place. It will also flexibly assign
new and existing capacity across the three routes from Australia to the US, Australia to New
Zealand and New Zealand to the US, maximising diversity and resiliency.
Southern Cross NEXT is expected to cost around US$300 million, and is designed to carry 72
Terabits of traffic, the equivalent of simultaneously streaming millions of movies a second,
ensuring Southern Cross can cater for its customers’ growing data requirements well into the
future. Services offered on the new system will be an extension and integration of the services
offered across the current Southern Cross platform. The construction will be funded by a
combination of capacity payments, equity contributions and financing.
Southern Cross Cables President and CEO Mr Anthony Briscoe said: “Southern Cross has
always been a provider of high-quality customer focused and resilient international capacity
solutions, and the addition of the new Southern Cross NEXT route to the existing platform will
provide existing and future customers with further resiliency and connectivity options between
Australia/New Zealand and to the US via Los Angeles. We are delighted that Telstra has
committed to the cable as an anchor customer, and more so that Telstra sees the value in our
capability long-term and is set to take a stake in the company.”
Telstra Group Executive for Enterprise Mr Michael Ebeid said: “Telstra has long been a key
customer of Southern Cross and this investment will mean Telstra has an immediate
ownership interest in the existing Southern Cross network, as well as in Southern Cross NEXT.
This route is extremely important to our business as US to Australia traffic accounts for more
than 80 per cent of all the internet traffic to Australia. Southern Cross builds on Telstra’s

existing footprint in Asia Pacific and creates a critical new path for ‘Australia In’ and ‘Australia
Out’ connectivity.”
Singtel Vice President, Carrier Services, Group Enterprise Mr Ooi Seng Keat said: “The
Southern Cross NEXT cable will be a new data superhighway expanding the existing Southern
Cross network, enhancing network redundancy and providing the lowest latency route from
Australia to the US. The new cable system enables Singtel Group and our Australian
subsidiary Optus to meet customers’ growing high performance data requirements for
bandwidth-intensive applications such as unified communications, enterprise data exchange,
internet TV and online gaming. With Singtel’s recent investment in the INDIGO cable system,
the enhanced Southern Cross eco-system will provide a new route from Southeast Asia to the
US.”
General Manager of Regulatory Affairs for Spark Mr John Wesley-Smith said: “This agreement
is a major milestone in building what will be a valuable addition to the Southern Cross network,
which provides critical connectivity between New Zealand, Australia, the Pacific Islands and
the USA. Southern Cross NEXT will ensure that Southern Cross can continue to provide high
quality resilient connectivity to New Zealand, and serve our customers’ increasing demand for
international capacity, for decades to come. We welcome Telstra as a prospective
shareholder alongside us in Southern Cross.”
With significant work already completed including pre-sales, marine survey, landing
arrangements, Pacific Island agreements, detail design and the cable RFT, the Southern
Cross NEXT project is well positioned to meet its target completion date of end 2020.

ENDS

For further media information:

Southern Cross Cable Network
Anthony Briscoe
President & CEO
+64 27 442 8482
anthony.briscoe@sccn.bm


Singtel
Sonny Phua
Manager
Group Strategic Communications and Brand
+65 8511 7996
sonnyphua@singtel.com


Telstra
Steve Carey
Media Manager, PR
+61 413 988 640
media@team.telstra.com

About Southern Cross
Southern Cross Cable Network provides fast, direct, and secure international bandwidth from Australia,
New Zealand and Hawaii to the heart of the Internet in the USA. The Southern Cross Cable Network
comprises two submarine communications cables which were first commissioned in November 2000
and January 2001 at a cost of USD1.3 billion. They provide Australasian broadband users with high
speed, resilient international connections to the US West coast where global Internet hubs are located.
The Southern Cross Cable Network is currently owned by Spark NZ, Singtel-Optus and Verizon
Business. Southern Cross Cable Network has offices in Bermuda, Sydney, Auckland and Wellington.
For more information visit Southern Cross at http://www.southerncrosscables.com


About Spark
Spark is New Zealand’s largest telecommunications and digital services company, providing a wide
range of mobile, broadband and entertainment media services for consumers and a comprehensive
suite of cloud, security and IT service management solutions for business customers. For more
information, visit www.sparknz.co.nz


About Singtel
Singtel is Asia's leading communications technology group, providing a portfolio of services from next-
generation communication, technology services to infotainment to both consumers and businesses. For
consumers, Singtel delivers a complete and integrated suite of services, including mobile, broadband
and TV. For businesses, Singtel offers a complementary array of workforce mobility solutions, data
hosting, cloud, network infrastructure, analytics and cyber-security capabilities. The Group has
presence in Asia, Australia and Africa and reaches over 700 million mobile customers in 21 countries.
Its infrastructure and technology services for businesses span 21 countries, with more than 428 direct
points of presence in 362 cities. For more information, visit www.singtel.com
. Follow us on Twitter at
www.twitter.com/SingtelNews.

Optus is the wholly-owned subsidiary of the Singtel Group and services over ten million customers each
day. It provides a broad range of communications services including mobile, telephony, business
network services, internet and satellite services and subscription television. For more information,
please visit www.optus.com.au
.

About Telstra
Telstra is a leading telecommunications and technology company. We offer a full range of services and
compete in all telecommunications markets in Australia, operating the largest mobile and Wi-Fi
networks. Globally, we provide end-to-end solutions including managed network services,
global
connectivity, cloud, voice, colocation, conferencing and satellite solutions. We have licenses in Asia,
Europe and the United States and offer access to more than 2,000 points of presence across the globe.
For more information visit
www.telstra.com.