“Soaring” data traffic and demand for emerging e-business applications are two of the main drivers behind Clear Communications' plans to invest $40 million in purchasing capacity on the Southern Cross cable, and extending the reach of its fibre-optic loops.
The first stage of the three-year network extension plan will be funded this financial year by a cash injection of more than $120 million from owner British Telecom, which is also funding the Southern Cross capacity purchase to increase international bandwidth.
CEO Tim Cullinane says the project is a vote of confidence in Clear by BT. "This represents a further significant investment in what is already the country's most advanced telecommunication network. It's a signal that we're serious about our goal of becoming New Zealand' leading provider of online services to businesses."
BT's investment is in addition to the $170 million contributed in August to settle Clear's bank debt, and the undisclosed amount BT paid in June last year to acquire 100% of the company.
Cullinane says Clear won’t roll the access network out to residential customers because it is uneconomic to do so.
"Genuine competition in local services to residential customers and to the majority of New Zealand businesses requires fair access to Telecom's monopoly local loop," he says.
"That's something that doesn't yet exist - and will require Government action."