Internet provider ihug has signed a multimillion-dollar deal to buy internet capacity from US telco Sprint.
Ihug began using Sprint for the majority of its internet traffic last week, enabling it to reduce its dependence on competitors such as Telecom New Zealand. The deal encompasses ihug's local and Australianoperation and trans-Tasman traffic.
Sprint, the world's second largest internet provider, moved into New Zealand at the start of October, targeting internet providers and the local offices of multinationals for internet and virtual private network services.
Australia/New Zealand managing director David Eagle said ihug would get more direct access to the world's internet than it ever had. He said Sprint carries 24 percent of the world's internet traffic.
"Users should see increased performance, and for local businesses - the world can get to you faster."
Ihug chief executive Martin Wylie said key to the deal was the price Sprint introduced to the market, which will help ihug's competitiveness and profitability.
Wylie hopes the relationship will develop and that Ihug will be able to tap into Sprint's international connections. While the renewable annual deal does not include voice services at this stage both firms said this could be part of future business as the relationship develops. Telecom New Zealand is also a customer of Sprint.
