Few countries rely as much on submarine cables as New Zealand, but we have largely put our faith in a single cable system, Southern Cross. There have been breakages since it was commissioned, in 2000, but because it was laid as a figure eight, with two separate strands, it has never failed outright.

Despite this success, there have been persistent calls for further cable investment, and not just to boost redundancy. Southern Cross’ critics have also sought to increase competition, to reduce broadband and communications costs.

Submarine communications have a long history. The first submarine communications cable project, which connected Ireland and Newfoundland, in Canada, began in 1854. It took four years to complete and transmit the first telegraph signal over its copper wires.

International cables are now the backbone of the internet, carrying 99 percent of international traffic. Expensive and difficult to lay, and maintain, they have to be able to operate at extreme depths, resist salt water and cope with errant ship anchors and even sharks, for which they seem to hold a peculiar fascination.

They also have to deliver capacity. Spark’s general manager for wholesale and international, Lindsay Cowley, says demand is expected to grow 11,000 percent over the next 10 years. That’s the equivalent of New Zealand’s population growing from four-and-a-half million to half a billion in the same period.

New Zealand’s Southern Cross cable system has been the country’s backbone for 20 years and it continues to be our workhorse, having had several capacity upgrades since 2000.

Over the years, several consortia have tried and failed to deliver alternatives, despite forging partnerships with carriers and enjoying backing from large users such as the advanced education network REANNZ and state-owned enterprise Kordia.

Pacific Fibre, backed by local internet entrepreneurs, including TradeMe founder Sam Morgan, cancelled its $400 million cable in 2012, shortly after a planned $100 million Kordia-backed trans-Tasman link, OptiKor, was also iced.

Finally, however, it seems New Zealand’s lone global link is about to be buttressed by at least one and possibly two new cables.

Southern Cross, half-owned by Spark, with 40 percent being held by Singtel-Optus and the final 10 percent by US-based Verizon, will definitely be joined to the $70 million Tasman Global Access (TGA) cable early next year.

The 2,300km TGA, a joint project between Spark, Vodafone and Telstra, and being laid by Alcatel-Lucent, will give New Zealand another cable route to the world, via the TGA cables feeding into Australia. It is expected to be commissioned in early 2017.

Beyond this, the Hawaiki Submarine Cable, stretching from Oregon to New Zealand and Australia, via Hawaii and featuring a branch to American Samoa, is scheduled for completion in mid-2018. In October, Hawaiki announced cable manufacturing had started.

Hawaiki has its doubters, but the project may have been bolstered in May when Amazon Web Services bought capacity, and again last month when Norfolk Island began lobbying the Australian Government for a connection to the cable.

Another consortium, Moana Cable, is due to be rolled out in 2018. Backed by the Spanish-owned Samoan company Bluesky and Alcatel-Lucent, Moana plans to follow a similar path to Hawaiki, via Hawaii and Samoa.

However, the consortium also plans to provide a service to other Pacific Islands, including the Cook Islands. It has also signed an interconnection agreement with another cable company servicing South-East Asia.

So, what does all this investment mean for consumers and for New Zealand?

The good news is our international links will be more robust and secure, and, for the first time, there is likely to be real competition between cable operators. This will boost access to international cloud services for local businesses and perhaps even for risk-averse government agencies and financial service providers.

It may even boost onshore data centre investment and prompt global cloud providers to locate nodes in New Zealand.

The bad news is that consumers will likely notice little difference.

Vodafone’s wholesale and operations director, Steve Rieger, says the market will be more competitive, but much of this has already been factored into current pricing. Southern Cross has been responding to the emerging competitive threat for some time.

“The consumer won’t suddenly notice a massive drop in the pricing for broadband because the international component now isn’t a high percentage of it.”

Rieger says that while international data is doubling every 16 months, a lot of consumer content, from service providers such as Netflix, is being served locally.

“The answer is it will provide a bit more price competition but consumption is going up at such a rate it’s not going to be highly noticeable,” he says.

“The real big benefit for the country is we are beginning to look at ‘triversity’, and we are on the road to having four options. It is actually extremely comforting.

“You have to plan for what you cannot expect. Given the criticality of digital connectivity to a country today just having two options is not enough.”

“You have to plan for what you cannot expect. Given the criticality of digital connectivity to a country today just having two options is not enough.”

Steve Rieger, Vodafone

CABLES AT A GLANCE

Tasman 2

Half owned by Spark, this is an old, small-capacity cable now used to provide redundancy for corporate traffic and voice. It is expected to be decommissioned once Tasman Global Access (TGA) goes live in 2017.


Tasman Global Access

Owned by Spark and Vodafone with Telstra as minority partner. It links New Zealand to Australia’s East Coast.


Southern Cross Cable

The workhorse of New Zealand’s connectivity for nearly 20 years, the 30,000km Southern Cross has been progressively upgraded since 2000, from an initial 120Gbit/s on each of its two cables, and several times since. It has a total estimated capacity of 22Tbit/s.


Hawaiki Submarine Cable

An independent cable project promising the fastest and biggest link between the US, Australia and New Zealand, at 30Tbit/s capacity.


Moana Cable

This project aims to serve the Pacific Islands more extensively than the rest of the cables, and to serve Asia too. It has 20Tbit/s of capacity.


Rieger says more and more New Zealand companies operate in the cloud, using services from the likes of Amazon Web Services, with applications hosted all over the world. Low latency and high quality connectivity is what makes this practical and possible.

“It’s equally possible that New Zealand will become one of the places that could host [such services],” he says.

Rieger has no concerns about the shape of the emerging market. It will provide product choice for users, and redundancy and security, not just in the number of cables, but in where they land, with sites being spread from Raglan to Northland.

Spark’s Cowley agrees resilience is the main benefit of recent cable investments. On top of increased capacity, the TGA cable will boost the security of our connections for a growing part of New Zealand’s internet traffic, to Australia and Asia.

“The reality is internet bandwidth is less than five percent of the broadband costs,” says Cowley. “Even if you made these zero, and it can’t be zero, the most you’d ever get is five percent of the cost.

“It’s not about cost reductions, it’s about improving the quality of the supply – resiliency and capacity to manage data growth.”

Cowley says the degree to which big users have access to that redundancy will depend on the agreements their providers have, either directly or through the cable operators’ re-sellers. Some ISPs operate at a price point where lower levels of redundancy make sense.

It’s the sort of question companies need to ask when contracting for data services.

Despite the imminent arrival of alternative cable systems, Cowley says we are not there yet. But Southern Cross’ operators are already starting to scope its replacement.

“The cable infrastructure challenge is real, but it’s not immediate.”