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  • August 2002 (Revised January 2003)
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Australia-Japan Cable: Structuring the Project Company

By: Benjamin C. Esty and Carrie Ferman
  • Format:Print
  • | Language:English
  • | Pages:18
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Abstract

In late September 1999, representatives from Telstri, Japan Telecom, and Teleglobe met to discuss the structure of the Australia-Japan Cable (AJC) project, a $520 million submarine cable system that would run from Australia to Japan. The sponsors, excited by the possibility of large returns, needed to move quickly to capitalize on the projected shortfall in Australia's broadband capacity. As telecommunications carriers, the sponsors needed additional capacity to serve their retail and wholesale customers. As cable system owners, they wanted to earn an appropriate return on their invested capital while mitigating ownership risks. The need to move quickly in the face of significant demand, competition, and technological uncertainty made it particularly risky to invest at this time.

Keywords

Information Infrastructure; Cooperative Ownership; Organizational Structure; Investment; Ownership; Capital; Corporate Governance; Management Teams; Communication Technology; Projects; Compensation and Benefits; Corporate Finance; Telecommunications Industry; Australia; Japan

Citation

Esty, Benjamin C., and Carrie Ferman. "Australia-Japan Cable: Structuring the Project Company." Harvard Business School Case 203-029, August 2002. (Revised January 2003.)
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About The Author

Benjamin C. Esty

Finance
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