ABOVE: If they come, we will build it.Wannabe Southern Cross Cable competitor Pacific Fibre now has verbal commitments from major anchor customers, and hopes to have signed contracts within a couple of months, chief executive Mark Rushworth told NBR this
.jpg)
ABOVE: If they come, we will build it.
Wannabe Southern Cross Cable competitor Pacific Fibre now has verbal commitments from major anchor customers, and hopes to have signed contracts within a couple of months, chief executive Mark Rushworth told NBR this afternoon.
Signing anchor customers has always been central to Pacific Fibre’s funding strategy as it seeks to raise around half a billion dollars within 18 months. If big pre-launch bandwidth deals can be stitched up, banks and private equity investors are much more likely to come onboard.
Mr Rushworth won’t name customers, but Vodafone and TelstraClear are obvious targets, as are independent ISPs and the megascience Square Kilometre Arrayproject, affiliated with KAREN.
Once the money's in the bag - and by Mr Rushworth's account it will be a lot faster than 18 months - work on the cable itself (which will be carried out by a contractor such as Alcatel-Lucent or Ericsson) will begin.
It will take around 22 months to secure resource consent and lay 13,000km of cable across the Pacific, Mr Rushworth estimates.
The start-up, which launched mid-March, is aiming to break the 50% Telecom-owned Southern Cross Cable’s monopoly on New Zealand’s broadband connection to the outside world by laying cable that links Sydney, Auckland, Wellington and the West Coast of the US.
Originally, Pacific Fibre sought to raise $NZ900 million, or around $US700 million. Today, Mr Rushworth said that after talks with cable vendors, that number had now been revised downward to $US500 million.
$1 million friends and family round
Pacific Fibre also revealed today it had raised $1 million what Mr Rushworth described to NBR as a “friends and family funding round”.
The round has brought on board
- David Kirk (whom along with Mr Morgan and Mr Drury is a also a Xero shareholder)
- Gareth Morgan (father of Sam)
- Seaworks chairman Bill Day
- Haines Recruitment founder David Wilson
- MYOB founder Craig Winkler (yet another with a Xero holding)
- A clutch of original TradeMe shareholders: Richard Abbott, Rowan Simpson, Phil McCaw
- Datacom investor Simon Holdsworth
Aussie presence
Mr Rushworth said the latest round enough to keep Pacific Fibre’s sales team going until the private company’s third and final funding round, which will be its big push to raise $US500 million, which will be a mix of equity and debt.
Pacific Fibre was founded by Rich Listers Sir Stephen Tindall and Sam Morgan, plus Xero founder Rod Drury. The power trio were joined by Mr Rushworth (most recently Vodafone’s chief marketing officer), John Humphrey (an ex Telecom cable strategist) and entrepreneur-about-town Lance Wiggs.
The founders have since been joined by sales director Mark Kuper (who held the same role for the Australia Japan Cable, or AJC). Mr Kuper, based in Sydney, has been pushing his Australian, Asian and Japanese contacts, Mr Rushworth said.
Mr Kuper has also taken a stake in Pacific Fibre.
David Kirk will become a director as well as an investor, said Mr Rushworth, using his networks in Australia to help raise Pacific Fibre’s profile and drum up business.
Simply by dint of its larger size, Pacific Fibre figures customers based in Australia will account for 80% of its business.
No word on Kordia tie-up
Mr Rushworth had no update on talks with state-owned Kordia, which is interested in cooperating with Pacific Fibre on the transtasman leg of the cable.
