Kordia's OptiKor cable would link to a cable already under construction by the SOE's putative Australian partner, Pipe Networks, which runs up to the US via Guam. Pipe has already built a spur out Sydney ready to take Kordia's cable. Kordia says the Guam route will be a gateway into Asia, bypassed by the rival, 50% Telecom-owned Southern Cross Cable which runs to the US via Hawaii.

The new proposed submarine fibre optic cable between Auckland and Sydney will not require any government funding, Kordia CEO Geoff Hunt told NBR today.

Kordia announced today its plans to build a second transtasman cable between New Zealand and Australia were well on track and would be completed by the end of 2011.

Mr Hunt said the main reason the cable was being built was to reduce the cost of international bandwidth for customers and to provide a competitive market place. Since Kordia announced its plans 18 months ago to build the OpiKor cable, Southern Cross has slashed its prices by 75%, resulting in a stronger market place for the customer, he said.

Mr Hunt said there was still room for Southern Cross to further drop its prices in the lead up to the launch of the OpiKor cable. Southern Cross currently owns the only fibre optic ultra-fast broadband transtasman cable, of which Telecom is a 50% shareholder.

Mr Hunt said the biggest challenge in building the $200 million cable network was “actually getting started” and clearing red tape.

He said another challenge was getting investors to see this as a long-term project when people were focused on short-term commitments due to budget constraints and the current economic conditions.

“This project has been initiated to encourage competition. Bandwidth will come down year after year. Due to this [the new cable] there will be much much much more competition.”

Mr Hunt said he doubted whether Spin Network’s proposal to build another  transtasman cable would go ahead if Kordia succeeds. “Kordia has a lower cost structure, its offers the best pricing and reliability. This will be important for customers such as banking institutions," he said.

Kordia has applied for a $15 million grant from Research and Education Advanced Network Zealand. The organisation is the Crown-owed company that owns and operates a high-speed telecommunications network for the research and education sectors.

Mr Hunt said since Kordia “floated the idea of the project” its board has got behind the proposal. The next stage will include survey work, calling in tenders and major suppliers, and finalising arrangements.

Communications Minister Steven Joyce said the government welcomed a second transtasman cable because it would aid competition. Mr Joyce told NBR the Southern Cross cable had plenty of capacity and built-in redundancy. and therefore a second cable was only needed to promote a competitive market place.

"I am aware there is a lot of interest (in Kordia's cable). It will be good to have an additional player. I'm not surprised they have clients lined up (wanting to invest in the technology)," he said.

Kordia chairman David Clark said the cable would provide the quickest, most direct and least expensive route for New Zealand customers. “OpiKor is a better proposition for New Zealand than any other cable project.”

Kordia is working closely alongside foundation customers and other partners to deliver a economic and sustainable product.

The laying down of the cabling will take around a month. The consultation process in scheduled to finish by May 2010.