Telcos bury hatchet for cable

Vodafone chief Russell Stanners (left) and Spark's Simon Moutter joined forces to build the new cable across the Tasman. Photo / Brett Phibbs

Vodafone, Spark and Telstra join forces to build new broadband link across the Ditch

Vodafone and Spark chiefs Russell Stanners and Simon Moutter have put aside competition to partner up and build the transtasman telecommunications cable along with Telstra.

Spark and Vodafone, in partnership with Australian provider Telstra, will spend US$70 million ($90.7 million) building a 2300km transtasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world, it was announced yesterday.

But both agree there will be no let-up in the mobile war between the two companies.

Competition for the mobile market is fierce, with Vodafone holding a 42 per cent market share at the end of June last year, Spark on 33 per cent and 2degrees with around 20 per cent.

The remaining 5 per cent is occupied by other smaller players.

Moutter said he was prepared to fight for the top spot in the mobile market.

"So it's game on, and customers are benefiting from great competition in mobile between our two companies and of course the third player in New Zealand, 2degrees," Moutter said.

Stanners also said competition had been fierce and that consumers were benefiting, with prices having dropped considerably in the past few years.

"Quite competitive is I think an understatement," Stanners said. "It's a great time to be a consumer of mobile services because every day there's very competitive offerings right across the market."

Stanners said he expected the market to continue to compete aggressively in the coming year, with more use of smartphones and 4G as well as fibre becoming increasingly important in the industry.

Moutter and Stanners said that where it made sense, they would look at other joint ventures.

The new Tasman Global Access Cable aims to boost broadband connections between the two countries, with Spark investing US$32 million in the project, due to start next year.

Alcatel-Lucent was chosen in the tender process to lay the cable, which is expected to be providing traffic data by mid-2016.

The cable will bolster New Zealand's connectivity to Australia, to accommodate growing internet traffic across the Tasman. That has grown to 40 per cent of total international traffic, from just 10 per cent in 2000.

Transpacific traffic has declined to 60 per cent of international traffic, from 90 per cent in 2000, according to the companies.

The cable will stretch from Raglan, on the North Island's west coast to Telstra's landing station at Oxford Falls in Sydney.

Transtasman cable
• $90.7m cost.
• 2300km long.
• Spark, Vodafone and Telstra partnership.
• Aims to bolster broadband traffic.