NZ may link China-Chile
Chile could put the New Zealand government on the spot by asking it to allow a proposed US$500 million (NZ$794m) internet cable linking Chile and China to come ashore in Auckland, industry sources believe.
A spokesman for Communications Minister Kris Faafoi said the Government was aware of the cable plan but ‘‘no formal approach’’ had been made for a landing station so far.
That could change soon. United States company WFN Strategies announced yesterday that Chile had awarded a US$3m (NZ$4.9m) contract for a feasibility study for the Chile-to-China cable to the company and fellow US firm TMG.
Foreign Affairs Minister Winston Peters visited Chile in July, and a source believed he discussed the project with the Chilean Government. But a spokesman for Peters was unable to confirm that.
China’s state-run press agency Xinhua has reported the cable would begin in the Chilean city of Valparaiso ‘‘passing New Zealand, Australia and French Polynesia’’ on its way to Shanghai.
An alternative, more expensive, route could see the cable terminate in Japan.
Long submarine fibre-optic cable networks need to come ashore periodically to connect to a power source, and an industry source said a New Zealand landing station was an ‘‘obvious choice’’.
The venture is being advanced at a time when Chinese involvement in the global telecommunications industry is being stymied by the US Government, with the NZ Government Communications Security Bureau also currently blocking a proposal from Spark to use Huawei equipment in its proposed 5G mobile network.
Reuters has reported Chilean President Sebastian Pinera met Huawei representatives in China in April and invited the company to tender for the 24,000 kilometre cable. Huawei has announced it will sell its 51 per cent stake in its submarine cable business, Huawei Marine Systems, but a route via New Zealand or Australia would appear to face potential obstacles if there was to be involvement from Chinese suppliers.
If the project went ahead and did land in Auckland, it would be the third trans-Pacific internet cable directly linking New Zealand with the Americas, after the Southern Cross Cable half-owned by Spark, and the Hawaiki cable completed last year. Remi Galasso, chief executive of Auckland-based Hawaiki Cable, said it was following the progress of the Chilean project as it could ‘‘potentially find synergies with Hawaiki’’.
The China-Chile cable could represent a ‘‘unique opportunity for New Zealand to become a hub between South America and Asia’’. ‘‘The internet and consequently the global submarine cable industry is currently led almost exclusively by the US cloud and content providers such as Google, Amazon, Facebook, Apple and Microsoft,’’ Galasso said. ‘‘The next big trend will probably be the arrival in Australia and New Zealand of Chinese players such as Baidu, Alibaba, Tencent and Xiomin and a direct connection from Australia and New Zealand to North Asia will then be mandatory.’’
Huawei NZ deputy managing director Andrew Bowater said he had no knowledge of the Chilean cable venture but the New Zealand subsidiary was not involved in Huawei’s cable business.
Southern Cross Cable said it still intended to build a new $520m internet cable between New Zealand, Australia and the US which it now expected to be completed ‘‘by the end of 2021’’.
The company said in April it had signed a supply contract for the Next Cable with Alcatel Submarine Networks. But spokesman Craige Sloots said on Wednesday that remained subject to the finalisation of a financing agreement between Next’s backers – Spark, Optus, Verizon and Telstra.
Spark spokesman Andrew Pirie said the proposed Chilean cable was not an impediment holding up the investment decision on Next.
Galasso said the New Zealand Government had missed an opportunity in not agreeing to connect Tokelau to Hawaiki’s cable, deciding to wait for Next.
‘‘I still feel very sad for the people of Tokelau who could already have been connected to Hawaiki, as our cable is only 60km away from Tokelau.’’
Hawaiki had not ‘‘given up’’ on the island, which is a dependent territory of New Zealand, and was proposing to link it to its cable via American Samoa, he said.
Australian internet provider Vocus, which owns the Orcon and Slingshot internet brands, meanwhile announced on Wednesday that it had bought a ‘‘substantial’’ amount of capacity on the Hawaiki cable.
The investment would greatly improve the quality of service for its customers in both New Zealand and Australia, it said.