By Lucy Craymer
WELLINGTON--New Zealand's Pacific Fibre, which was planning to
build a second trans-Pacific communications cable network linking
New Zealand, Australia and the U.S., has folded after failing to
raise enough funds for the project, the company said in a statement
Wednesday.
"We've spent millions of shareholder funds trying to get this
done, and despite getting some good investor support, we have not
been able to find the level of investment required in New Zealand
initially and more broadly offshore," said Pacific Fibre Chairman
Sam Morgan.
The company needed to raise 400 million New Zealand dollars
(US$324 million) to build the undersea fiber optic cable network,
and was previously planning to have secured the funds by June.
"We feel like we've done everything we can to succeed and we are
all hugely disappointed that we have not managed to get there,"
said Mr. Morgan.
New Zealand now relies on the Southern Cross fiber optic cable
network for all of its international broadband links, giving the
network's owners--Telecom Corp. of New Zealand (TEL.NZ), SingTel
Optus and VerizonBusiness--total control over pricing.
Auckland-based, privately owned Pacific Fibre had planned to shake
things up by building a 13,000 kilometer cable connecting Sydney
and Auckland with the U.S.
"We started Pacific Fibre because we know how important it is to
connect New Zealanders to global markets. The high cost of
broadband in New Zealand makes it hard to connect globally and it
is this market failure, not a technical failure, that we tried hard
to solve," said Pacific Fibre co-founder and director Rod
Drury.
The company was backed by private investors including a number
of high profile New Zealanders. Since the company had launched in
2010 it had signed customers such as New Zealand government company
Research & Education Advanced Network New Zealand Ltd. and
Vodafone New Zealand, a subsidiary of Vodafone Group Plc.
(VOD.LN).
Write to Lucy Craymer at lucy.craymer@wsj.com
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