New Zealand's Pacific Fibre Folds, Fails to Raise Funds for Trans-Pacific Cable Network

   By Lucy Craymer 
 

WELLINGTON--New Zealand's Pacific Fibre, which was planning to build a second trans-Pacific communications cable network linking New Zealand, Australia and the U.S., has folded after failing to raise enough funds for the project, the company said in a statement Wednesday.

"We've spent millions of shareholder funds trying to get this done, and despite getting some good investor support, we have not been able to find the level of investment required in New Zealand initially and more broadly offshore," said Pacific Fibre Chairman Sam Morgan.

The company needed to raise 400 million New Zealand dollars (US$324 million) to build the undersea fiber optic cable network, and was previously planning to have secured the funds by June.

"We feel like we've done everything we can to succeed and we are all hugely disappointed that we have not managed to get there," said Mr. Morgan.

New Zealand now relies on the Southern Cross fiber optic cable network for all of its international broadband links, giving the network's owners--Telecom Corp. of New Zealand (TEL.NZ), SingTel Optus and VerizonBusiness--total control over pricing. Auckland-based, privately owned Pacific Fibre had planned to shake things up by building a 13,000 kilometer cable connecting Sydney and Auckland with the U.S.

"We started Pacific Fibre because we know how important it is to connect New Zealanders to global markets. The high cost of broadband in New Zealand makes it hard to connect globally and it is this market failure, not a technical failure, that we tried hard to solve," said Pacific Fibre co-founder and director Rod Drury.

The company was backed by private investors including a number of high profile New Zealanders. Since the company had launched in 2010 it had signed customers such as New Zealand government company Research & Education Advanced Network New Zealand Ltd. and Vodafone New Zealand, a subsidiary of Vodafone Group Plc. (VOD.LN).

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