$445m NZ internet cable opens for traffic

Friday, 20 July 2018

Competition has opened up in the market carrying internet traffic to and from New Zealand with the completion of a new US$300 million (NZ$445m) cable to the United States and Australia.

Hawaiki Cable's 15,000 kilometre fibre-optic cable is the first high-speed connection for New Zealand that is not partially-owned by Spark.

French-born telecommunications executive Remi Galasso, who fought a seven-year battle to secure customers and investors for the cable, said it would 'future proof' New Zealand internet capacity for the next 25 years.

'Many people expressed doubts about the project, and I had as many doubts as anybody.

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'But I always believed it was achievable, so long as we kept a fighting spirit. And yes, we had many dark days over the past seven years, when faith played a very important part,' he said.

Galasso said he expected to be too busy for a proper celebration on Friday 'but I am sure we will find the time to open a bottle a bubbles or Central Otago Pinot Noir'.

Vodafone technology director Tony Baird said it had lit up its optical fibre on Hawaiki Cable and would use it as its primary conduit for internet traffic between New Zealand and the United States, with the Southern Cross Cable – half-owned by Spark – providing back-up.

'We will keep a bit on Southern Cross but not a lot, and will be moving traffic over during the remainder of the calendar year.'

The Tasman Global Access cable – built by Spark, Vodafone and Telstra last year – would be Vodafone's main link to Australia, with the Hawaiki Cable providing back-up on that route, Baird said.

Interest in a new internet cable peaked around five years ago, with many blaming New Zealand's reliance the Southern Cross Cable for the then-stingy data caps usually offered by internet providers.

However, much of the heat went out of that debate a few years ago when internet providers began offering competitive uncapped broadband plans prior to the onset of more cable competition.

Telecommunications Users Association chief executive Craig Young said the biggest benefit of the Hawaiki Cable was that New Zealand would not be reliant on Southern Cross' single fibre cable to the US and the two existing cables to Australia.

Hawaiki Cable chief executive Remi Galasso - with wife Mania and their son Darian - has been the driving force behind a new $445m internet cable connecting NZ.

That could be important if there was an outage. But the more diverse paths to the country could also encourage more online businesses to base data centres in the country, he said.

Communications Minister Clare Curran said the cable meant 'faster, better internet, and fewer bottlenecks, particularly when data is streamed from overseas'.

New Zealand's internet links could fall back again if more additional cables aren't built before 2030, which is when the Southern Cross Cable is expected to become at risk of dropping out of service.

Southern Cross is planning an additional cable between New Zealand, Australia and the United states, called Next, but has not yet confirmed that it has secured shareholder funding for that US$300m investment.

Galasso would not comment on whether there might be a 'Hawaiki Cable 2' but said he didn't believe there would be a need for additional systems for at least the next five years.

'Please let me get my breath back. New Zealand is now very well served in terms of international subsea cables, with three redundant systems. It might be different for Australia,' he said.

Hawaiki Cable chairman Sir Eion Edgar inspects the cable-laying ship Responder in Sydney last year before it leaves port to lay a new trans-Pacific internet cable.

Hawaiki Cable is only the second fibre-optic cable laid across the Pacific to New Zealand, after Southern Cross.

HAWAIKI CABLE FACTS

- The 15,000km cable has a current total capacity of 43 terabits, enough to transfer the contents of a 4Gb USB stick in less than a millisecond.

- The cable is owned by Galasso and fellow investors CallPlus founder Malcolm Dick, Forsyth Barr chairman Sir Eion Edgar and Heartland bank's largest shareholder Greg Tomlinson.

- Customers include Vodafone, Amazon Web Services and Crown-owned research network operator Reannz.