PIPE Networks Limited, through its subsidiary PIPE International (Australia) Pty Ltd, has signed a Memorandum of Understanding (MoU) with Kordia Group Ltd, that will see the two companies collaborating on a project for a new, private fibre optic cable that will link Australia and New Zealand.
Under the MoU, PIPE International and Kordia will leverage each other's key capabilities in an endeavour to increase international capacity and competition in the New Zealand marketplace.
"This announcement is a shot in the arm for telecommunications in New Zealand and I am delighted to be working with KordiaTM to resolve the chronic bandwidth issues facing all New Zealanders," PIPE Networks Managing Director Bevan Slattery said.
In late March Google CEO Eric Schmidt told the Australian Financial Review that there needed to be more undersea cables laid between Australia and New Zealand to guarantee there was enough cable capacity for the internet boom.
"Much like Australia, New Zealand suffers from a severe lack of competition when it comes to international bandwidth and the price of bandwidth reflects that," he said.
"During the planning stage of our Sydney to Guam cable (PPC-1), PIPE International had always intended to assist in the development of PPC-2 a new competitive submarine cable connecting New Zealand to Australia and beyond," Mr Slattery said.
Kordia CEO Geoff Hunt said that he was very pleased to be working on an initiative that could be critical to New Zealand's economic transformation.
"This MoU signals a change for New Zealand that will help boost our economy and enable us to compete globally by providing competition on the trans-Tasman capacity route. It also complements the government's commitment to deliver world-class broadband to all New Zealanders: we're upping the ante at home and offshore," Mr Hunt said.
PIPE International's Sydney landing station was designed to co-locate the PPC-2 system whilst the PPC-1 cable system has two additional pairs of fibre installed to a branching unit in the waters 120km east of Sydney. Mr Slattery noted that "this investment in the additional pairs of fibre will allow any new New Zealand to Australia cable to simply interconnect to PPC-1 in the waters off Sydney and directly connect to those spare pairs which will already be connected to our landing station in Sydney. As a result this negates many of the costs, timing and permitting issues associated with landing PPC-2 into Australia."
To achieve its interest in PPC-2, the PIPE International will contribute landing station space in Australia, the allocated 2 pairs of fibre on the Sydney section on PPC-1 and initially 240Gb/s of onward capacity on PPC-1.
The MoU is the first major milestone towards the commencement of construction of PPC-2. Once both companies confirm the commercial and practical feasibility, PIPE Networks and Kordia would together oversee the financing, construction, operation and maintenance of the cable system.