Australia, New Zealand Plan $60M Trans-Tasman Submarine Cable

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New Zealand's major telecoms players, Telecom, Vodafone and Telstra, announced on Tuesday that they have entered into a non-binding memorandum of understanding that would pave for the construction of a new $60 million worth fiber-optic cable connecting New Zealand with Australia. Opposition parties in the country immediately slammed the concept as furthering the already monopolistic nature of connectivity and pricing that they already have.

With a capacity of 30 terabits per second, about 300 times New Zealand's data needs, the three telecoms players said they expect to finalise the new cable's design within the next few months. Target construction completion date has been set anytime from mid to late 2014.

But New Zealand's Green Party said the proposed telecoms project "would not address the monopoly Telecom currently has on connectivity to the rest of the world."

"The second trans-Tasman cable will improve New Zealand's Internet connectivity but will do little to break Telecom's monopoly over pricing," Gareth Hughes, Green Party ICT spokesperson, said in a statement.

"The move will now make it much harder to justify building a second cable to the USA, yet this is exactly the kind of internet infrastructure New Zealand needs if we are to have a truly resilient and competitive network. Reliance on a single provider for our international internet provision has meant higher prices, data caps, and less innovation for services. Today's announcement is likely to have only a small impact on the current unsatisfactory situation. It's not the step change our economy needs."

Clare Curra, Labour's communications and IT spokesperson, likewise said that as the cable infrastructure will be built by the telecommunication companies, there is a concern that they may provide the retail services on it.

"Labour seeks assurances that these issues are addressed transparently and that there is commercial wholesale capacity available for other carriers on an equal footing," Ms Curran said.

The cable, the fourth linking the two countries, targets to provide enough capacity for the next 20 years.

The two countries are currently serviced by two other undersea cables, the Tasman 2 and the Southern Cross, owned by Telecom New Zealand, SingTel Optus and Verizon Business.

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