New sub-sea internet cable by 2015?
A plan to lay a new $350 million submarine communications cable linking New Zealand, Australia and several Pacific Islands to the United States has taken a step forward.
Australia's fourth-largest internet provider and telecommunications firm, TPG Telecom, announced it had signed a letter of intent to acquire capacity on Hawaiki Cable's proposed 14,000 kilometre cable network.
New Zealand-registered Hawaiki Cable is headed by former Alcatel-Lucent executive Remi Galasso, who hopes to complete the cable by 2015.
There have been several failed efforts to build a business case for a new trans-Pacific cable that would link New Zealand and Australia with the United States and compete with the Southern Cross Cable.
The highest-profile of these, Pacific Fibre, which was backed by entrepreneurs Sam Morgan, Rod Drury and Sir Stephen Tindall, also signed several letters of intent with telecommunications firms that professed interest in buying capacity on its proposed cable. But one independent industry source with knowledge of the initiative believed Hawaiki had probably got the further and represented the best hope to date.
Its business case revolves on aggregating demand from several Pacific Islands, which would be served by spurs from its main cable, in addition to the bigger economies of New Zealand and Australia.
TPG chief financial officer Stephen Banfield said it intended to buy capacity on the Sydney-to-US and Sydney-to-Whangarei sectors of Hawaiki's cable. He indicated the intention was to buy tens of millions of dollars-worth of capacity.
"Whilst the detailed financial terms of the deal are confidential, TPG can advise that it would expect to incur capital expenditure in relation to this project of between US$10m and US$20m for each of the next three financial years commencing in 2014," he said.
Hawaiki announced last month that it had signed a "memorandum of understanding" with regional development agency Northland Inc to land the cable in the Whangarei area.
TPG Telecom is listed on the ASX, where it is valued at A$897m.
- © Fairfax NZ News