$65m contract to buy cable capacity

Steven Joyce

The Government has signed a $65 million contract to buy capacity on the Hawaiki international telecommunications cable set to land in Whangarei.

Government-owned company Research and Educational Advanced Network New Zealand (Reannz) has entered into the anchor tenancy contract with Hawaiki Cable for its proposed new international telecommunications cable, Science and Innovation Minister Steven Joyce and Communications and Information Technology Minister Amy Adams announced.

The news has been welcomed by regional economic development agency Northland Inc as way of bringing investment to the region and country.

Hawaiki Cable is planning to build a 14,000km cable system between New Zealand, Australia, Hawaii and the US west coast and says the project could be operating within two years.

The cable will land in New Zealand at Whangarei. Hawaiki said it had signed "turnkey contracts" with US providers for key infrastructure and connectivity in the US and to get the cable to Whangarei, and the Government announcement yesterday will give the company security that there will be customers here using the cable.

Northland Inc CEO David Wilson said the announcement was one more piece of the puzzle that supported Hawaiki Cable toward the realisation of the project.

"We've always believed the Hawaiki Cable project is a critical piece of infrastructure that will attract further information and communication technologies investment " Mr Wilson said.

Mr Joyce said the Government's whole of contract contribution secures a 25-year anchor tenancy on the cable for Reannz, which operates New Zealand's high-performance research and education broadband network.

The total cost of the tenancy includes an initial contribution of $15 million and annual fees over the 25-year period. The Government has provided the $15 million contribution from an appropriation set aside for purchasing an anchor tenancy on a new transtasman and trans-Pacific submarine cable. Reannz will meet the annual fees out of its existing revenues. The agreement is conditional on Hawaiki obtaining sufficient pre-sales contracts from other telecommunications companies.

"Building a new cable will increase the resilience of New Zealand's telecommunications links and raise the level of competition," Ms Adams.