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Telcos announce investment in trans-Tasman cable

Sarah Putt | Feb. 20, 2013
A new submarine cable project that will link New Zealand and Australia at a cost of around US $60 million ($71 million) has been announced by Telecom, Vodafone and Telstra.

Pacific Fibre, backed by Rod Drury, Stephen Tindall and Sam Morgan, was a $400 million submarine cable project that intended to link New Zealand with Australia and the US, but it was shelved last year.

State Owned Enterprise Kordia also had a project to build trans-Tasman cable called Optikor, but that too was shelved. Chief executive Scott Bartlett told Computerworld last week that the company did not intend to revive the project.

"The reality is building a second submarine cable is critical for the country but it's so difficult commercially to get off the ground," he says.

He says that when Pacific Fibre was announced, Optikor lost its potential customer base.

"Pacific Fibre was just so much sexier. Kordia had done so much work, it had done desktop surveys which cost about a million bucks, it was a whole lot of work to get that point and the customers were lining up [before Pacific Fibre].

"I think I am saying that if Pacific Fibre hadn't come along then on balance Optikor probably would have gotten away."

There have been other proposals for a second international cable, including a suggestion from Kim Dotcom that he might revive the Pacific Fibre project, and a South Pacific project call Hawaiki Submarine Cable that would link New Zealand and Australia with several Pacific islands by the end of 2014.

TUANZ mixed reaction

In a blog post TUANZ CEO Paul Brislen has mixed views on the announcement.

"While it's only a memo of understanding (MoU) at this point, the $70m build probably will go ahead as it makes good business sense," he writes.

"However it does make it more difficult to build a direct NZ-US cable in the future, under the current conditions."

"A trans-Tasman pipe means we're more likely to continue accessing content that's already stored in Australia and so strengthen Australia's role as the local hub. I can see a future where the Southern Cross Cable has expired and any replacement is a direct link from Australia to the US rather than via New Zealand. That would condemn us to a world where data connections to North America have to go the long way round, increasing latency issues and ping times and decreasing our desirability as a destination for hosting content."

Brislen says TUANZ wants to understand how the cable will be wholesaled, more about Telecom's shareholding in competing cables (TGA and Southern Cross) and where it will land.


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