A company hoping to build a US$350 million submarine internet cable out of New Zealand has lined up a listed Australian telco as a customer in a multi-million dollar deal.
TPG Telecom, an ASX-listed IT and internet company, has issued a letter of intent saying it plans to acquire fibre capacity on the Australia-United States leg of Hawaiki's proposed cable system.
A statement issued by both parties last night, which called the agreement a "multi-million deal", said TPG also intended to acquire capacity on the Sydney-New Zealand section of the international internet link.
Auckland-based Hawaiki Cable is planning to build a 14-000km cable system between New Zealand, Australia, Hawaii and the US west coast and said last month that the project could be operating within two years.
According to plans aired last year, the main cable would also have branches running to Norfolk Island, New Caledonia, Vanuatu, Fiji, Wallis, Samoa and American Samoa.
TPG's chief financial officer Stephen Banfield said yesterday the terms of the deal were confidential but advised the company "would expect to incur capital expenditure in relation to this project of between US$10m and US$20m for each of the next 3 financial years commencing FY14".
Hawaiki's chief executive Remi Galasso said the company was "honoured to work with TPG".
"It's leading position in the Australian telecom market makes the group a key partner for our new cable system," Galasso said.
TPG already owns a cable system running between Sydney and Guam.