2 Jul 2014

Joyce backs international cable plan

9:22 am on 2 July 2014

Science and Innovation minister Steven Joyce is confident a project to build a international telecommunications cable will stack up financially.

The Government has entered into a $65 million deal with Hawaiki Cable for capacity on its proposed new cable linking Australia, New Zealand and the United States.

But a former chief executive of a company which failed to build a similar cable is sceptical.

Mark Rushworth ran Pacific Fibre in 2012 when it failed to get the $300 million it needed to build a cable that would have competed with the Southern Cross cable built in 2000.

He said a new cable would need large Australian telecommunication companies to sign up, but companies like Telstra, that already own lines to the United States, are unlikely to help a competitor.

Steven Joyce, however, said he understands other Australian companies who already have shares in a cable are interested in a second cable.

Mr Rushworth said New Zealand needs another cable to boost competition and lower internet prices.

The 13,000 kilometre cable is proposed to be operational in 2016.