Government signs $65 million anchor contract for new international cable

Tuesday 1st July 2014

The government has entered a conditional 25 year contract with Hawaiki Cable worth $65 milllion to secure a new international telecommunications cable capable of handling huge data loads needed for research and education.

The $65 million the government will pay includes an initial $15 million contribution and annual tenancy fees over the 25-year period paid to Hawaiki, and is conditional on other telecommunications companies entering pre-sale contracts. The tenancy fees will be paid by Research and Educational Advanced Network New Zealand, REANNZ, a state-owned company.

Announcing the contract today, science and innovation minister Steven Joyce and communications and information technology minister Amy Adams said the agreement was an important step towards securing a second international cable for New Zealand.

The Hawaiki cable will link New Zealand to Australia and the US with further potential links to a number of Pacific Islands. It is expected to come online in 2016. The existing South Cross Cable, which is half-owned by Telecom, is expected to meet New Zealand’s requirements until 2020.

"The government is pleased to see signs of increasing competition in New Zealand's international cable market and will continue to support options that are on track to achieve this goal," Joyce said in a statement.

Last September the government offered $15 million and to take an anchor tenancy on a new cable, provided it could handle turbo data for research and education traffic.

BusinessDesk.co.nz

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