1.

ASSETS

CASH

FIBER CABLES

LANDING BAY

2. WHAT MADE THEM UNIQUE

UNDER SEA CABLE.

OWNER OF THE CABLE WILL SPONSOR

3. WHO ARE THE CAPITAL PROVIDERS

Telstra, Teleglobe, and Japan Telecom

RSIK – MARKET RISK – ALL CASH MUST BE RECOUP UPFRONT TO COVER COST QUICKLY DUE TO
ADVANCE DEVELOPMENT. DUE OBSOLEMCE.

Prices are falling 20- 40 % due to increased capacity.

LIMITED AVENUE TO EXPAND.

The cable has a finite period.

Total demand compared to demand for japan Australia

Booking of the under-ship sea takes two years to reach.

Sovereign risk is relatively low.

The cable will go through 3 teritories.

They believe the presale contract will avert the risk.

Originally, we were looking for four sponsors to simplify management of the project company. In
selecting partners, there had to be, first and foremost, good chemistry between the firms and the
individuals. After that, we wanted partners who would be investors as well as users [capacity buyers] in
roughly the same proportion. The key was to find partners who were strong financially so that their
presales capacity contracts would support the project and give us credibility with bankers. Finally, we
wanted to find partners that would bring something to the project. That meant bringing significant
volume and/or access to landing stations.

The sponsors
Cost overruns

Booking ship for two years

Construction delays can be very expensive. Needs serious advance planning

Delay in acquiring permits for the landing stations. Partnering with japan who has a landing station will
help lower this risk.

Advantage is that they have 150 years’ experience.