The New Zealand Government-owned company, Research Education Advanced Network New Zealand (REANNZ), is set to become the first customer for Pacific Fibre's planned trans-pacific fibre cable link between New Zealand, Australia and the US West Coast.

 

REANNZ has agreed on key commercial terms with Pacific Fibre for a 'substantial contract' to supply international capacity on the new Pacific Fibre cable system for its 'KAREN' broadband service to the New Zealand research, education and innovation communities.

 

REANNZ CEO, Donald Clark, said that under the agreement, Pacific Fibre would provide "effectively unconstrained capacity to Australia and the USA from mid-2014, allowing us to collaborate with the rest of the world on an equal footing.”

 

REANNZ is investing its own operational funding, along with NZ$15 million that the Crown granted to support a capacity purchase on a new submarine cable system. The deal will see the amount of capacity available to KAREN subscribers rise from the current 1Gb/s to an initial 40Gb/s and then to 160Gb/s over time.

 

"At current market rates, the value of the capacity commitment is over $NZ400m, though obviously we are paying far less than that. This is a long term commitment, and one that recognises our support for the Crown's policy goals of increased international cable competition at the right stage in the market process."

 

The two companies are now negotiating the final terms of the agreement.