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New $520m cable for NZ

The Next cable will provide a new chapter for Southern Cross, but one that came too late to prevent Hawaiki Cable from muscling in on its monopoly on the US-NZ data route. Image: Stuff.co.nz

A new US submarine internet cable will be built between New Zealand, Australia and the United States by the Southern Cross Cable company at a cost of US$350 million (NZ$520m).

The joint venture, which is part-owned by Spark, says it had signed a manufacturing contract for the cable, called Next, with Alcatel Submarine Networks and expected it would be in service in 2021.

The investment by Southern Cross means it will be able to continue to provide connectivity between the three countries beyond 2030, some time after which its existing cable network – completed in 2000 – is expected to fail and be withdrawn from service.

Southern Cross' monopoly on the New Zealand-US route was broken in July when the $445m Hawaiki Cable between New Zealand, Australia and the US went live.

Southern Cross says its new Next cable would be able to carry 72 terabits of data per second – more than three times the capacity of its existing network.

However, unlike its existing network which is fully "redundant" thanks to its "figure of eight" design centred on Hawaii, Next – like Hawaiki Cable – will be a single cable between the US and Australia with a branch to connect New Zealand.

Next will also provide connections to Fiji, Tokelau and Kiribati.

Spark currently owns 50 per cent of Southern Cross with Singapore's Singtel and US company Verizon owning the other half of the company.

But the stakes of the three companies are due to be diluted as a result of an agreement struck in December to allow key customer Telstra to take a quarter-share of the firm.

-Stuff.co.nz/Tom Pullar-Strecker

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