Telcos issue tender for trans-Tasman cable

CallPlus raises concerns about cable partners Telstra, Telecom and Vodafone

A joint plan by Telecom, Vodafone and Australia's Telstra to lay a new fibre-optic sub-sea cable between New Zealand and Australia has taken a step forward.

The companies have issued a tender inviting "several international companies" to bid to lay the cable, Telecom spokesman Andrew Pirie says.

The development is the first outward sign of progress since the three companies made an announcement in February that they would collaborate on building the Trans Global Access cable, at an expected cost of US$60 million (NZ$76.2m).

The cable will provide an alternative transit route to the Telecom half-owned Southern Cross Cable for internet traffic to and from New Zealand and the rest of the world.

The three firms expect to evaluate the bids in August and sign a contract by the end of the year, with work likely to begin early next year, Pirie said.

The cable would terminate either in Auckland or Raglan, with the other landing point near Sydney, he says.

The Commerce Commission said in February that it will consider competition concerns once it had contracts to look at. Pirie says the three partners have decided against inviting other companies to invest in the cable but will be wholesaling capacity on the cable, which he believes should mitigate any competition concerns.

The commission is expected to review the wholesale arrangements to ensure the cable partnership does not unduly advantage Telecom and Vodafone's retail internet provider businesses.

CallPlus chief executive Mark Callander says he still had concerns about the cable partnership, given Telecom and Vodafone's combined share of the telecommunications market.

"Having your two largest players integrating vertically like that is a very dangerous position."

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