A new undersea transpacific fibre optic cable connecting New Zealand to the US has been proposed by Auckland based company Hawaiki Cable Limited. Hawaiki Cable, led by former Alcatel Lucent executive Remi Galasoo, has proposed to lay a 14,000 Km undersea cable linking New Zealand, Australia and several Pacific Island nations to the US West Coast through Hawaii by the end of 2015. The company has stated that the cable system will be based on 100 Gigabits per second (Gbps) wavelength technology which will deliver more than 20 Terabits per second (Tbps) of design capacity and have a lifetime of 25 years.
The New Zealand Government has earmarked $15 million towards the US$350 million project and has signalled that it is prepared to commit as an anchor customer by buying capacity for research and educational users in New Zealand.
So far Hawaiki Cable has reported to have signed memorandums of understanding regarding to the purchase of capacity on the cable with several internet service providers in Australia and New Zealand including TPG Telecom, iiNet, Voyager and Orcon. The cable maker has also signed long-term agreements with local government entities and subsidiaries in New Zealand and the US to facilitate cable landing stations and links to local fibre networks. These include an agreement with Northland Inc to set up a landing station in Whangarei and an agreement with Oregon State Government owned Tillamook Lightwave (TLW) and privately owned US fibre carrier CoastCom to use its Pacific Cable landing station and provide a fibre link to the city of Hillsboro.
Currently all internet traffic to and from New Zealand is handled by the Southern Cross Cables Limited owned Southern Cross Cable Network which effectively represents a monopolistic situation. Hawaiki Cable’s entry into the market would challenge Southern Cross Cables’ dominance and provide the industry with increased capacity and speed.
In theory competition should lead to lower prices for consumers which in this case would reduce the cost of accessing the internet in New Zealand. This would reduce the cost of doing business online which may lead to an increase in the number of firms conducting business online and subsequent growth in the digital economy.