Kordia looks at joining Axin in building internet cable under the Tasman

Kordia chief executive Geoff Hunt. Photo / Dean Purcell

State-owned Kordia may join forces with a Chinese-backed company which has secured funding to build a submarine internet cable between Auckland and Sydney.

Axin confirmed its intentions yesterday to build a transtasman internet pipe. Chairman Robin Lee said the company had a funding agreement for the US$100 million ($122 million) project with a state-owned Chinese bank.

If it went ahead, the cable would be completed in about 18 months, Lee said.

The Axin project would rival the Southern Cross Cable Network, which has a monopoly on international internet capacity.

Commentators said more cable operators would bring competition and put downward pressure on the price of transporting overseas internet traffic into New Zealand. Axin is the Australasian representative of China Communications Service, in which China Telecom has a majority stake.

Huawei Marine, a subsidiary of Chinese telco giant Huawei, is to supply equipment for the cable.

Kordia, which has been planning a transtasman cable since 2008, may also be involved with the Axin project.

Kordia's cable, dubbed "Optikor", had struggled to get off the ground and chief executive Geoff Hunt said this month the venture was "on pause".

However Lee said yesterday Axin and Kordia had plans to work together.

"Kordia would be operating the cable. At the moment we really haven't really set the structure and situation. We still have a lot of things to negotiate," Lee said.

Hunt said last night that Kordia and Axin had been talking. "We're in discussions with a number of parties, including Axin. Our objective is to firstly lower the cost of international bandwidth for New Zealand customers and secondly to give a good commercial outcome for Kordia."

Axin's announcement did not deter Pacific Fibre, another player looking to enter the cable market. Board member Rod Drury said plans to build a cable between Auckland, Sydney and Los Angeles remained unchanged.