Soaring data traffic and demand for emerging e-business applications are two of the main drivers behind Clear Communications' plans to invest $31.1 million in purchasing capacity on the Southern Cross cable, and extending the reach of its fiber-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 $123.3 million from owner British Telecommunications (BT), which is also funding the Southern Cross capacity purchase to increase international bandwidth.
Public affairs manager Ross Ingles says Clear will extend the reach of its existing fibre-optic loops in the central business districts (CBD) of Auckland, Wellington and Christchurch, and will push the network out to a number of other business centers.
A substantial increase in the network's capacity is also planned.
"We'll announce later this year where the network will be extended to," he says. "Things like resource consents are time-consuming."
Ingles says Clear has long since passed the point where more than 50 per cent of its traffic is data, and that demand is soaring.
"There are extraordinary levels of interest in emerging e-business applications," he said.
Within the CBDs, Clear plans to infill by taking spurs off existing rings into new streets to attract new customers.
"We've already got quite a high take-up rate per building, where up to 40 per cent of customers will swap over (to us)," Ingles says.
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's leading provider of online services to businesses."
BT's investment is in addition to the $132.3 million contributed in August to settle Clear's bank debt, and the undisclosed amount BT paid in June last year to acquire 100 per cent 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."