Sam Morgan, Stephen Tindall and Rod Drury plan to build new Pacific Fibre cable linking NZ, Australia and US (Update 2)

By Bernard Hickey New Zealand Internet entrepreneurs Sam Morgan and Rod Drury have joined up with retailing entrepreneur Stephen Tindall to announce plans for a NZ$900 million optic fibre cable linking New Zealand, Australia and United States by 2013. They said the 13,000 km link would have five times more capacity than the existing Southern Cross cable and could unleash billions of dollars of economic potential by connecting New Zealand businesses to global markets via the Internet. (Updated with detail, background and rewritten throughout, cost remains corrected at NZ$900 million from multi-billion dollar)

They said they aimed to provide unlimited high speed broadband for Australasian consumers that challenged existing cables, including the current single Southern Cross system controlled by Telecom New Zealand. Such a new cable across the Tasman and the Pacific would cost upwards of NZ$900 million. Other founders include former Vodafone Chief Marketing Officer Mark Rushworth, tech industry veteran John Humphrey and tech entrepreneur and consultant Lance Wiggs. Pacific Fibre is in talks with cornerstone investors and customers. It aims to secure funding for a 5.12 Terabits/sec fibre cable that would deliver five times the capacity of the existing Southern Cross system. “We desperately need a cable that is not purely based on profit maximisation, but on delivering unconstrained international bandwidth to everybody, and so we’ve decided to see whether we can do it ourselves,” said Sam Morgan, the founder of TradeMe. Stephen Tindall, the founder and controlling shareholder of The Warehouse, said the New Zealand Institute had identified billions of dollars in economic potential by unleashing the Internet. "This is necessary and basic infrastructure – we must decrease the distance between New Zealand and the international markets. Doing so will be incredibly valuable for New Zealand and Australian businesses and consumers. If we are able to deliver on this cable this it could be as valuable to our NZ economy as the quantum leap refrigerated ships were to our export trade many years ago," Tindall said. Tindall said early feasibility work had been done and now Pacific Fibre wanted to find out the level of interest from potential partners before launching a full business case and a proof of concept to take to investors and bankers. "We realise the risks are large, but are prepared to push through to the next stage. We have released this news today primarily to ensure that any parties who are interested in this space have an opportunity to speak with us during this early planning phase,” he said. Pacific Fibre said it aimed is to deliver the highest capacity and lowest latency international internet service to Australia and New Zealand by connecting Australia and New Zealand direct to the USA with 13,000 km of cable. The cable from New Zealand to the USA would be direct and shorter than existing cables, delivering lower latency or lag. It could also branch off to several Pacific islands. Rod Drury, the founder of email archiving software AfterMail and cloud accounting service Xero, said a digital divide was growing between New Zealand and the rest of the World. “We need this infrastructure if we are serious about growing international businesses from New Zealand," Drury said. “The introduction of a new cable would drive competition and capacity in the international bandwidth market, building on the success of the Southern Cross cable, which was critical for New Zealand when it was built 10 years ago. This proposed cable would provide internet service providers and large and small businesses with a major boost in capacity and speed, but also give the extra redundancy that another cable provides," Drury said. Mark Rushworth said 90% of New Zealand internet traffic went offshore so a major boost in international capacity was needed to fix the "7pm bottleneck." "The situation is bad now and only going to get worse as the New Zealand Ultra-Fast Broadband initiative and the Australian National Broadband Network start delivering fibre to the premise," he said. “We are seeing a huge increase in demand from consumers and businesses driven by the use of video which is increasing in resolution and use. Businesses love very high resolution multi party video conferencing – all the way up to telepresence systems, while grandparents expect to be able to Skype video their grandchildren – and that too will be in HD or better" More detail is available here at PacificFibre.net