A trans-Tasman tunnel, hurrah!

(with apologies to Harry Harrison)

Telecom , Vodafone and Telstra have announced plans to build a trans-Tasman submarine cable. While it’s only a memo of understanding (MoU) at this point, the $70m build probably will go ahead as it makes good business sense.

However it does make it more difficult to build a direct NZ-US cable in the future, under the current conditions.

Today, New Zealand is a net importer of data. Most of our surfing takes us off-shore. Traditionally this has meant the US but with an increase in the number of Content Distribution Networks (CDNs) in Australia hosting more of the content we’re after, that’s changing somewhat. Building a cable heading across the Tasman that way means we’ll have more capacity and potentially more competition on a vital trade route.

TUANZ has long argued that we need more capacity on the international leg for two reasons. Firstly, to provide a competitive market and secondly so we can end our role as net importer of data and become an exporter of data. I’d like to see mega data centres set up in New Zealand becoming the hub of all things content-related. I’d like to see us hosting data rather than accessing it offshore and that means more pipes to the outside world.

A trans-Tasman pipe means we’re more likely to continue accessing content that’s already stored in Australia and so strengthen Australia’s role as the local hub. I can see a future where the Southern Cross Cable has expired and any replacement is a direct link from Australia to the US rather than via New Zealand. That would condemn us to a world where data connections to North America have to go the long way round, increasing latency issues and ping times and decreasing our desirability as a destination for hosting content.

So we have mixed views on the idea of a Tasman cable, as you can see.

Having said that, we’re very keen to understand how the cable will be wholesaled, how Telecom’s role as shareholder in both competing cables will work and just where the cable will land in New Zealand. Currently fibre landing zones dictate the cable will come in to Whenuapai on Auckland’s west coast, but as that’s part of an active volcanic field, I’d hope the government would step up and suggest some alternatives, without adding a massive cost to the project. It’s important we have diversity on our international leg – currently we can survive breaks on the cable itself but an event in Auckland would mean no international connectivity for a very long time.

Telecom, Telstra and Vodafone are holding a press conference in half an hour – I’ll add anything from that once we’ve heard more.