19 Feb 2013

New trans-Tasman submarine cable proposed

8:33 pm on 19 February 2013

Three major telecommunications companies intend to band together to build a $71 million trans-Tasman submarine cable.

Telecom, Vodafone and Telstra say the Tasman global access cable is expected to be completed by late 2014.

Telecom said it would improve New Zealand's internet connections internationally while also strengthening links to Asian markets.

Last year, Pacific Fibre cancelled plans to build a second fibre-optic undersea cable linking Australia, New Zealand and the United States after failing to raise the $US400 million needed.

Telecom owns half of New Zealand's sole cable link with the rest of the world, the Southern Cross Cable.

Telecom chief executive Simon Moutter said it is not unusual for telecommunications companies to club together to have a stake in more than one cable in and out of the home market.

Mr Moutter said the planned cable is cheaper and would strengthen links into Asian markets by using Australia's existing four cables.

The Telecommunications Users Association said New Zealand needs greater international capacity because of the greater use of data by users, but it is concerned about Telecom's dominance in the ownership of the undersea cables market.

Critics have raised fears that a sole cable operator could raise prices and limit speeds, jeopardising the ultra-fast broadband initiative.

Those claims have been rejected by Telecom and the Government.