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Another year, another big Pacific cable plan from Hawaiki - this time with a Northland tie-in

Is it that time of the year already?

Hawaiki is making its annual bid to raise funding for a submarine fibre optic cable linking Australia, NZ and various Pacific Islands to the US.

The company's Noumea based CEO and owner Rémi Galasso has been trying to drum up support for this project since 2009 (initially under the SPIN network moniker).

We've seen various partners mooted with previous attempts, from the French government to Kordia.

This time around, Hawaiki has signed a memorandum of understanding with regional economic development agency Northland Inc to land the new cable in the Whangarei area.

Under the MoU, "Northland Inc will aid both the landing and the funding of the cable, including sourcing local investors and promoting funding through the Northland Regional Council’s Investment and Growth Reserve."

The cable is budgeted at $US350 million (in a new twist on previous plans, a segment has been added linking Hawaii with the mainland US).

I hope a second cable operator does jump into the NZ-US market. Two or more players are required for competition. And good luck to Hawaiki.

But I can't see how Northland local government reps, and other Hawiaki partners, will succeed Rod Dury, Sir Stephen Tindall and Sam Morgan failed in their bid to raise $400 million for Pacific Fibre. 

The only cable that's actually in the works is the Telecom-TelstraClear-Vodafone joint venture effort to lay the second major cable between NZ and Australia (from where there's a choice of multiple cables up to Asia and the US).

There are some question marks over that project, such as ISPs' wholesale access terms; ownership percentages; and iffyness over 50% Southern Cross Cable shareholder Telecom also holding a stake in the new link. Still, it's better than nothing, and at least it's fully-funded, and set to go live in 2015.

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Comments and questions

They are playing this a lot smarter since the SPIN days, and seem to be gradually putting the blocks in place to get this away.

This is very different from the transTasman effort as it will actually change the game here in NZ. It's their turn now and I hope they do well. One ex-Pacific Fibre staffer is involved, and local customers will be a lot further ahead in thinking about how to deal with a new cable provider these days.

Do you notice how the only people who complain about this are not in the industry. Maybe there isn't really a problem. And that the design of the SX cable meant we weren't unduly exposed to a outage - you know, a figure 8 redundant type design. What if the cost of international bandwidth was such a tiny portion of the cost of BB services now that it really didn't matter (and that most of the cost lay in say domestic backhaul or, worse still, Chorus access costs)? What if there was competition in the international space, but it was in the only market that really mattered (Australia)? "Southern Cross' prices are effectively set by those that prevail on the internationally more competitive US-Australia route" Here's the thing about SX that no one gets... Australia effectively paid for the cable for NZ, and still do to some extent. There was no business case for NZ in 1999/2000, and it looks the same in 2013.

As an aside, you would expect the bulk of the cost to be higher the closer it is to the customer, because the cost is shared by fewer people. A $350M cable shared by 4,000,000+ people is less per person than a $4-5k hole in the ground to a house shared by ~ 2.5 people.