Pacific Fibre has announced the first customer win for its planned $400 million cable system linking New Zealand, Australia and the USA.
The New Zealand cableco announced it had agreed to terms of a long-term capacity supply deal with the state-owned Research and Education Advanced Network New Zealand (REANNZ).
REANNZ owns and operates KAREN, a high-speed broadband network for local education and research organizations.
The exact size of the deal is undisclosed, but involves an NZ$15 million ($11.8 million) state budget allocation as well as money from REANNZ's own operational funding.
REANNZ CEO Donald Clark said the value of the capacity purchased is worth NZ$400 million, “though obviously we are paying far less than that.”
He said the deal will increase the capacity available for KAREN users from 1Gbps today to 40Gbps and eventually 100Gbps. “Pacific Fibre will provide us with effectively unconstrained capacity to Australia and the USA from mid-2014,” he said.
REANNZ's choice is significant because Kordia, which is in the planning stages for rival subsea cable Optikor, has long named the organisation as a potential customer for its own project.
Both Kordia and Pacific Fibre are planning their respective cables to compete with Southern Cross Cable (SXC), the sole subsea cable currently linking to New Zealand. But both the hopefuls have acknowledged that there may not be room in the market for two new cables.
Pacific Fibre last month revealed that Pacnet, which had been backing the planned cable, had withdrawn from the project some time ago. But Pacific Fibre said it would build the cable alone, announcing an invitation to tender for the project.