Top business figures in bold broadband bid
$900m to bridge digital divideBY MICHAEL FIELD
Several of New Zealand's key innovators have launched a $900 million bid to build an international fibre cable across the Pacific that aims to give virtually unlimited high speed broadband for New Zealand and Australia.
Pacific Fibre includes Warehouse founder Stephen Tindall, TradeMe creator Sam Morgan and software entrepreneur Rod Drury, who said they aim to break the digital divide between New Zealand, Australia and the rest of the world.
It puts them head-to-head with the bigger Southern Cross Cable network part-owned by Telecom New Zealand.
They say they have broad quotes for $900 million but believe they can get it cheaper.
"We desperately need a cable that is not purely based on profit maximisation, but on delivering unconstrained international bandwidth to everybody, and so we've decided to see whether we can do it ourselves," says Sam Morgan, who is also a director of Fairfax Media, owners of Stuff.
Tindall said there were billions of dollars in economic potential by unleashing the internet.
"This is a bold vision which, as realists, we know will not be easy to deliver, it will take a huge effort to complete, and has many risks. While we have completed early feasibility work it is essential for people to know we now need to determine the level of interest from potential partners before we go to the next stage of a full business case, risk assessment and proof of concept to take to investors and bankers," he said.
Other founders include Mark Rushworth, former Vodafone Chief Marketing Officer, technology industry veteran John Humphrey, and strategy consultant and entrepreneur Lance Wiggs.
The group is looking to secure funding and build a 5.12 Terabits/sec capacity fibre cable to be ready in 2013 connecting Australia, New Zealand and the USA - the initial proposal is a cable which will deliver five times the capacity of the existing Southern Cross system.
Stephen Tindall commented: "The New Zealand Institute identified billions of dollars in economic potential by unleashing the internet, and it is beyond time to address the issue. This is necessary and basic infrastructure - we must decrease the distance between New Zealand and the international markets. Doing so will be incredibly valuable for New Zealand and Australian businesses and consumers. If we are able to deliver on this cable this it could be as valuable to our NZ economy as the quantum leap refrigerated ships were to our export trade many years ago."
Tindall said they realise the risks are large.
"We have released this news today primarily to ensure that any parties who are interested in this space have an opportunity to speak with us during this early planning phase."
Pacific Fibre aim is to deliver the highest capacity and lowest latency international internet service to Australia and New Zealand by connecting Australia and New Zealand to the USA with 13,000 km of cable.
The cable from New Zealand to the USA would be direct, substantially reducing the distance versus existing cables, and thus delivering lower latency, or lag, associated with the cable.
The planned cable would also offer potential for branching units to provide connectivity to several Pacific islands.
Drury said they were seeing a growing digital divide between New Zealand and the rest of the world.
"We need this infrastructure if we are serious about growing international businesses from New Zealand," Drury said.
"The introduction of a new cable would drive competition and capacity in the international bandwidth market, building on the success of the Southern Cross cable, which was critical for New Zealand when it was built 10 years ago.
"This proposed cable would provide internet service providers and large and small businesses with a major boost in capacity and speed, but also give the extra redundancy that another cable provides."
Rushworth said 90 percent of New Zealand internet traffic went offshore, so a major boost in international capacity is needed.
"The situation is bad now and only going to get worse as the New Zealand Ultra-Fast Broadband initiative and the Australian National Broadband Network start delivering fibre to the premise," Rushworth said.
"We are seeing a huge increase in demand from consumers and businesses driven by the use of video which is increasing in resolution and use."
Grandparents expected to be able to Skype video their grandchildren from now on - and in high density.
"But mostly we want to unleash that creative talent New Zealand has, and be on a level footing with the rest of the world."
State owned enterprise Kordia, which planning a trans-Tasman fibre optic cable, has welcomed the proposal.
Kordia CEO Geoff Hunt says they have been in discussions with Drury and others over the past few months.
"It'll take more than a lone player to make that happen by 2012," says Hunt.
"Pacific Fibre is planning to work with reputable partners and a strong team to deliver this project on time," says Hunt.
"With the preparatory work that we have already completed on the Auckland to Sydney OptiKor cable, it makes sense for Kordia to team up with Pacific Fibre."
- © Fairfax NZ News
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