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Does Pacific Fibre still have a business case?

Mon 6 Aug 2012
FYI, this story is more than a year old

Under the guidance of New Zealanders Sam Morgan, Rod Drury and Sir Stephen Tindal – the proposed 12,950km cable failed to attract the NZ$490m funding needed from investors.

Yet an AP Telecom advisor believes a business case still exists for the link between Auckland, Sydney and Los Angeles – providing it is financed.

“The rule of thumb these days is that you don’t put more than 40% on any one link to buy diversity,” said John Hibbard, former Pacific Telecommunications Council president and a board advisor to Pacific Fibre sales agent AP Telecom. “That means you’ve got to have three cables.

“You can argue Southern Cross has two, and then the third one – but you can’t really buy anything on (Telstra’s) Endeavour cable because it is not selling (indefeasible rights of use), it’s only selling leases, and only generally in small quantities, as I understand you either go via Guam with either (Australia-Japan Cable) or PPC-1.

“If you want a lower latency route that is comparable or better than Southern Cross – then Pacific Fibre represented exactly the answer.

“Yet there’s a degree of apprehension that wouldn’t exist if the management had a high degree of expertise.

“In the last six months they haven’t had an experienced submarine cable person on their team, and that’s weighed on the minds of some of the carriers who know the business and have been buying and therefore have been hesitant.”

Do you think Pacific Fibre still has a viable business case? Let us know your thoughts below.

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