Fingers crossed over Pacific Fibre cable
The chances of Southern Cross Cable's near monopoly over international internet connectivity being challenged appear to be receding, as rival start-up Pacific Fibre fails to provide a hoped-for update on its progress.
Chief executive Mark Rushworth said last month that he hoped to provide an update on progress it is making in securing financing for its proposed US$400m trans-Pacific fibre-optic cable.
His comment followed Pacific Fibre missing a second self-imposed mid-June deadline for securing the equity investment and loans that would allow its project to proceed.
InternetNZ chief executive Vikram Kumar said the society was keeping its fingers crossed that financing for the cable would be found despite the global economic situation.
"With every passing week we get more and more concerned, but there is not much we can do other than say we'd love it for them to succeed," he said.
Kumar said that while Southern Cross offered plenty of capacity, a new cable could reduce prices and make it easier for internet users and internet providers to buy international bandwidth on more flexible terms than was possible today.
"Because there is no competition in that market, there is no innovation happening in that area," he said.
Privately owned company Axin hopes to build a separate cable between New Zealand and Australia at a cost of about US$100 million ($124 million). Axin said in January that it had finalised an agreement with Anglo-Chinese joint venture Huawei Marine on the terms of an undersea survey that would need to be carried out before construction of its cable could begin.
However, it was not clear whether that deal amounted to a definite agreement the survey would go ahead. Axin chairman Robin Lee could not be reached for comment and Kumar said InternetNZ had had no word on the progress of Axin's initiative.
Kumar said there appeared to be no obvious "plan B" if both cable ventures fell by the wayside. The Government hadn't indicated any willingness to help finance a new cable other than through using its own purchasing power to provide support, he said.
Pacific Fibre's shareholders include high-profile businessmen Sam Morgan, Sir Stephen Tindall, Rod Drury and United States venture capitalist Peter Thiel.