Pacific Fibre cable project cancelled; Optikor to step in?

1 Aug 2012

Pacific Fibre, a planned international submarine cable project linking New Zealand, Australia and the USA has been scrapped after failing to raise the required NZD400 million (USD324 million) funding. The Pacific Fibre company was established in 2010 in Auckland and had expected to roll out a 13,000km undersea fibre network reaching California in 2014, with one of its aims to lower the cost of bandwidth for New Zealand’s broadband customers, who currently pay disproportionate data rates compared to regional neighbours such as Australia. However, today (1 August 2012) the Pacific Fibre board resolved to cease operations, with director Rod Drury announcing: ‘We’ve spent millions of shareholder funds trying to get this done and despite getting some good investor support we have not been able to find the level of investment required in New Zealand initially and more broadly offshore… The global investment market is undoubtedly difficult at the moment but we knew this was always going to be hard, regardless of our timing… We started Pacific Fibre because we know how important it is to connect New Zealanders to global markets. The high cost of broadband in New Zealand makes it hard to connect globally and it is this market failure, not a technical failure, that we tried hard to solve.’ The company also questioned whether the New Zealand government’s nationwide Ultra-Fast Broadband (UFB) rollout scheme could satisfactorily meet its goals without the establishment of an alternative international high speed cable connection to the dominant Southern Cross Cable Network, 50%-owned by Telecom New Zealand.

TeleGeography’s GlobalComms Database notes that there is a potential alternative submarine cable builder to take the place of the aborted Pacific Fibre project in New Zealand, albeit with less ambitious geographical scope. In September 2011 state-owned Kordia said that it was putting its plans for a new cable route to Australia (under the Optikor name) on hold, in light of the fact that Pacific Fibre was at the time the frontrunner in terms of getting an alternative submarine project implemented. However, in October 2011 Chinese firm Axin Ltd unveiled rival plans for introducing trans-Tasman high speed connectivity, and it was subsequently revealed that Axin and Kordia had collaborated on a number of aspects relating to a proposed cable project, which could be developed as a joint venture under the Optikor banner.

New Zealand, Kordia