Company drops plan for second trans-Pacific cable
Updated at 7:27 pm on 1 August 2012
Three of New Zealand's top entrepreneurs have dumped a bid to build the country's second international internet link.
Their company Pacific Fibre had planned to build the 13,000 km, fibre-optic undersea cable linking Australia, New Zealand and the United States by 2014, at a cost of $490 million.
Its backers promised it would bring down the price of using the Internet, providing competition for the the country's main international internet link.
The entrepreneurs behind the project included TradeMe founder Sam Morgan and Sir Stephen Tindall.
Company founder Rod Drury told Checkpoint the company managed to raise only half of the money needed.
Mr Drury says he has personally lost more than a $1 million.
Bad news for consumers
Internet New Zealand says the collapse of the Pacific Fibre undersea cable project is a blow to New Zealand businesses facing high internet costs.
Chief executive of Internet New Zealand Vikram Kumar says the Telecom cable has enough capacity but it is too expensive.
"As a monopoly supplier, there's no outside pressure for them to reduce prices other than to try and keep some internal price parity between Australia and New Zealand. So what we've really lost is this downward pressure from the market from Pacific Fibre."
Next story in Business: Westpac upgrades next year's house price forecast
Copyright © 2012, Radio New Zealand