Kordia internet cable 'on track'

By Hamish Fletcher

Kordia has no intentions of working with rivals Pacific Fibre and says plans for its own transtasman internet cable are progressing strongly.

Kordia is proposing to build an internet link between Auckland and Sydney to compete with the Southern Cross cable, which runs between New Zealand, Australia and the United States.

Southern Cross has a monopoly in the transtasman market and Kordia argues its "OptiKor" cable will lower what internet providers pay to send and receive international web traffic.

Up to 85 per cent of the country's online traffic comes from overseas and volumes are set to skyrocket as the Government's ultra-fast broadband network is rolled out.

While Kordia plans a second transtasman cable, its rival Pacific Fibre has a similar dream - and hopes to go a step further and run a link all the way to the United States.

This more ambitious project carries with it a US$400 million price tag, while Optikor is expected to cost around US$100 million.

Like Kordia, Pacific Fibre is gathering funds for the cable build and received a $15 million boost last month after signing up the Crown-owned REANNZ as its first customer.

REANNZ owns and operates the high-speed broadband network that connects universities and research centres. Kordia had expressed interest in the REANNZ contract in 2009, but lost out when the tender was shelved that year. However, Kordia's communications manager Emma Morrison said this week REANNZ was never part of the OptiKor business model and the Pacific Fibre win did not put the company's plans on the backburner.

Morrison also denied speculation Kordia and Pacific Fibre would work together on the cable projects.

"Kordia is not at this stage planning to pool its resources with Pacific Fibre as our own OptiKor project continues strongly. We are still working to secure foundation customers and discussions are going well,"she said.

This is despite Kordia chief executive, Geoff Hunt, previously tabling the idea of a collaboration.

"One possibility would be that OptiKor could form the Sydney-Auckland portion of the Sydney-Auckland-California project," Hunt said in June last year. But Pacific Fibre chief executive Mark Rushworth told the Herald the company was open to working with Kordia. "We've always been interested in working with OptiKor or anyone else in building a cable. It makes commercial sense. We've always been very open to a [cost-sharing] approach."

While the pair had been talking in the "early days", Rushworth said neither party has been able to make something work.

Like Kordia, Pacific Fibre is keeping its cards close to its chest but Rushworth said the company's funding drive was "on track and all going well". If enough capital can be raised, the 12,750km cable is expected to be completed in 2013.

Pacific Fibre has received tenders to supply materials and build its cable and said it was in the process of selecting a vendor.

- NZ Herald

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