Science and Innovation minister Steven Joyce is confident a project to build a international telecommunications cable will stack up financially.
The Government has entered into a $65 million deal with Hawaiki Cable for capacity on its proposed new cable linking Australia, New Zealand and the United States.
But a former chief executive of a company which failed to build a similar cable is sceptical.
Mark Rushworth ran Pacific Fibre in 2012 when it failed to get the $300 million it needed to build a cable that would have competed with the Southern Cross cable built in 2000.
He said a new cable would need large Australian telecommunication companies to sign up, but companies like Telstra, that already own lines to the United States, are unlikely to help a competitor.
Steven Joyce, however, said he understands other Australian companies who already have shares in a cable are interested in a second cable.
Mr Rushworth said New Zealand needs another cable to boost competition and lower internet prices.
The 13,000 kilometre cable is proposed to be operational in 2016.
