Telecom, Vodafone and Telstra have announced they plan to jointly build a new communications cable between Auckland and Sydney in a surprise collaboration.
The companies said the ''Tasman Global Access'' cable would significantly improve New Zealand's international connectivity and ''strengthen links into fast-growing Asian markets''.
The cable was likely to cost less than US$60 million they said.
There is currently only one high-speed fibre-optic cable across the Tasman, the Telecom half-owned Southern Cross cable, and an older Telstra-owned cable.
That means telcos could need to rely on routing traffic via Hawaii if there was an outage on Southern Cross' Auckland-Sydney leg.
The proposal may be controversial as it could undermine the business case for a new trans-Pacific cable linking Australia, New Zealand and the United States.
Pacific Fibre, a company backed by entrepreneurs Sam Morgan, Sir Stephen Tindall and Rod Drury, tried and failed to raise $400m for such a cable last year.
Speaking at a Telecommunications Users Association meeting in Wellington last week, Telecom chief executive Simon Moutter said a new cable to the US would be looking ''the wrong way'' given the growing importance of Asia.
Telecom, Vodafone and Telstra said they had signed a ''non-binding memorandum'' to invest in the new trans-Tasman cable, which they hoped to complete mid to late next year.
Simon Moutter and Vodafone New Zealand chief executive Russell Stanners said in joint statement that the business case was compelling, as it would provide greater capacity and ''global redundancy capability''.
''It also reflects the growing importance of trans-Tasman internet traffic. About 40 per cent of both Telecom and Vodafone's international internet traffic is now Australia to New Zealand, versus just 10 per cent in 2000,'' they said.
''We are seeing increased data content being provided from Australia-based servers by global companies and being accessed by New Zealand internet users. An additional cable connection with Australia will strengthen the business case for international data servers to be located in New Zealand.''
- © Fairfax NZ News
Do you think Wellington deserves its spot in CNN's list of top coffee cities?Related story: CNN rates Wellington coffee among best