Telstra has rejected overtures to join a Google consortium planning new trans-Pacific telecom infrastructure.

Already underway with its own new link connecting Sydney with Hawaii, Telstra confirmed that it had met Google to discuss cable plans. It decided not alter its current strategy.

Google met with carriers from around Asia in Sydney six weeks ago attempting to lock in partners for the so-called Unity project. It is apparently yet to lock in a route for the multi-terabit system while other regional carriers believed to be in talks such as Asia Netcom and Flag Telecom have so far shied from confirming support.

Telstra COO Greg Winn said yesterday that Google offered little value. He said, “the consortium approached us and they basically wanted us to go in because they needed us initially. We didn’t have a need for it. We had already made a decision on our cable infrastructure… we’re in good shape.” Telstra is ploughing ahead with its new Pacific Ocean cable with Alcatel Lucent, which it plans to have operational in late 2009. Winn said it was also closely eying the market and keeping in mind options to meet requirements.

Telstra’s Sydney to Hawaii cable, its second Pacific link after the Australia Japan Cable, will help the company reduce capital costs associated with third party purchases.

Telstra CFO John Stanhope added that while not currently planned, third party capacity sales remain an option.

“75% of all traffic goes to the US so we expect significant savings from the investment in our Sydney to Hawaii cable. They will be capital savings from not having to buy from third party players like Southern Cross,” Stanhope said. “By building our own link to the US and with our pairs to the US west coast on Australia Japan Cable, we will substantially reduce the cost of our transmission. Furthermore the amount of capacity we have available will allow is to sell capacity, if we choose to.”

Winn indicated that Telstra is still closely eying international capacity developments, which currently include new and proposed cables off the east and west coasts of Australia. Pipe Networks is looking at a Sydney to Guam link and indicated this week that it is in active discussions for capacity sale agreements to underpin investment.

According to Winn, “we look at lots of options and we have multiple options. No matter which way somebody else may move, we’re going to move faster another way.” He added, “we don’t sit on our hands and we have a lot of options depending on which place the competition goes or how the market moves. We are rich in options to fulfil the capability.”

Telstra CEO Sol Trujillo said cable investments followed a strategy to have more control over the costs of broadband. Trujillo said, “one of the great lessons you can see from PTTs around the world, and we are ahead of most on this, is that as you deploy broadband, and think about the bandwidth requirements and services that will be delivered, these people talk about mitigating these costs on a going forward basis.” He added, “we will continue to stimulate a lot more on-net strategy to achieve some of the savings as well as some other options that we will not be talking about.”

Telstra’s comments on Google are the first time a carrier has even admitted to talks with Google on a cable even though the industry has been abuzz with rumour and talks about Google’s plan.

An off-the-record source from another Asia carrier confirmed that Google was still talking to carriers, with a more recent follow-up meeting being held in Hong Kong involving parties from China, Japan and India.

However, personalities might be creating an issue with the source stating that Google’s representative is approaching the telcos “from a very high horse. Lots of Google attitude and belief thatthey should get everything they want.”“So they won’t get any favours in terms of working with existing ones being built. They might have to just buy IRUs and dark fibre.”Tim Marshall 

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