The board of Pacific Fibre has announced it will cease operations, citing an inability to raise the $400million required to fund the cable build.
Pacific Fibre planned to build a 13,000 kilometre high speed fibre-optic cable connecting New Zealand and Australia to California.
“A 13,000 km cable is clearly an audacious thing to try and do. We were fortunate to find supportive shareholders, fantastic staff and early customer support from the likes of REANNZ and Vodafone,” said chairman Sam Morgan in a media statement.
“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.”
“The global investment market is undoubtedly difficult at the moment but we knew this was always going to be hard, regardless of our timing.”
“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 co-founder and director Rod Drury in the same statement.
“We still cannot see how the government’s investment in UFB makes sense until the price of international bandwidth is greatly reduced,” said Drury.
Pacific Fibre said that in September 2011, the Australian telecommunication research company Market Clarity reported the cost of bandwidth to the US from New Zealand as 5.8 times greater than the price paid by Australians.
“This project had encouraging early momentum and we were pleased to attract a great team and board, and shareholders who invested because they felt passionately that this problem needs solving for New Zealand,” said Morgan. "We believed funding for these long term infrastructure investments would have been more readily available and were confident the business case
“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.”
“We’d like to thank our staff, shareholders, customers, partners and supporters”, Morgan said.