Pacific Fibre loses Pacnet, nabs key personnel

Former Pacnet director of business development to lead vendor RFP negotiations

New Zealand submarine cable venture Pacific Fibre will be responsible for finding the full $US400 million funding for a proposed fibre link between Australia, New Zealand and the United States after a memorandum of understanding with Pacnet lapsed earlier this year.

However, a former Pacnet employee and submarine cable expert will lead Pacific Fibre’s renewed charge.

The company, headed by Vodafone New Zealand’s former chief marketing officer, Mark Rushworth, is currently undertaking a fifth and final rounding it believes will secure the investors required to fully fund the fibre project.

Pacific Fibre most recently secured $NZ5.5 million in funding in its fourth round, which it included New Zealand investment fund Valar Ventures, partially owned by PayPal founder Peter Thiel.

It remains unknown how much the company has raised so far in funding. However, in announcing the appointment of the company’s chief financial officer, finance director, Lance Wiggs, noted the incoming Michael Gleissner would be in charge of finding $US350 million worth of funding.

The final round of funding is expected to largely source investors from the United States.

The company signed the memorandum of understanding with Pacnet in July last year, shortly after the announcement of the fibre initiative, which would enable the companies to each operate a fibre pair on the cable and jointly oversee cable supply contracts as well as operations and maintenance costs.

At the time, Pacnet chief executive, Bill Barney, said the joint venture would form part of the company’s attempts to expend its Pacific and south east Asian network coverage. The company was also expected to provide its experience in building similar submarine cables, as it is the largest investor in the 36,800-kilometre EAC-C2C submarine cable spanning several Asian countries.

However, Rushworth confirmed to Computerworld Australia that the memorandum with Pacnet had lapsed in late February and would not be signed, citing inability to meet key performance indicators under the agreement.

“While we would have to fund the full build cost, [investors are] comfortable we can do it,” he said.

Pacific Fibre has already forged ahead with supply contracts for the cable, this week releasing a request for proposal for the build to five major vendors. It will be headed by recently appointed business development director, Mike Constable, who had held the same position at Pacnet and, according to the company, had played a “key role” in developing the submarine cable operator’s Unity system.

A large positive, Rushworth said, was that Pacific Fibre would own a monopoly on the cable and wouldn’t introduce a third or potentially fourth competitor to the submarine cable market. The company is already set to compete with Southern Cross - which already operates fibre between Australia, New Zealand and Hawaii -  as well as Kordia, which has plans in motion for a new trans-Tasmania submarine cable.

“We’re not sharing the market with Pacnet; they’ll be operating at a retail level buying retail products off us or off Southern Cross but they won’t have the same underlying cost infrastructure with us so they’ll be at a disadvantage,” Rushworth said.

The 13,600 kilometre cable ultimately aims to provide bandwidth capacity of 5.12 terabits per second to peering exchanges in New Zealand and Australia when it is lit up by 2013.

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAU

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