Pacnet backs Pacific Fibre to build new ANZ-US fibre cable

Stuart Corner
Wednesday, 28 July 2010 15:43

IT Industry - Development

Regional submarine cable network operator, Pacnet, has joined with New Zealand startup, Pacific Fibre, to build a new submarine cable network linking Australia, New Zealand and the US.

The two have commited to building, at a minimum, a two fibre pair system with a design capacity of 5.1tps, but say it would well expand if other parties join them to build the system.

Pacific Fibre is a New Zealand company founded earlier this year by a group of well-known New Zealand businessmen concerned at the high price of international capacity out of New Zealand, a situation that they attributed to lack of competition.

According to Pacnet CEO, Bill Barney, the cost of international capacity from Australia and New Zealand to the US is way too high, even allowing for the 'thinness' of the route and the long distances involved.

"Today a 10gbps wavelength across the Atlantic costs about $US300k. From the US to Japan it is about $US1.3m. From Australia to the US it is about $US40m. From the Middle East, where there is almost no liberalisation it is $16m.

"To put that into perspective when we talk of building a $US400m cable system the build cost is between $US600k and $US1m per 10Gbps. So you are going to see enormous price changes what twill enable Australian and New Zealand customers to get access to broadband in overseas markets."

He added: "We think that bringing competition to this market will have even more impact even than the NBN. It is not just having access to the US it is having access to all markets, and by having low cost access to the US you will get that access."

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