Challenging the Monopoly

New Zealand company Pacific Fibre has embarked on an ambitious unlisted capital raising to fund a submarine cable from Australia to New Zealand and on to the US west coast, challenging the monopoly of Southern Cross Cable, the only cable connecting Australia to New Zealand. ANZ and Credit Suisse are leading the $4 million capital raising. ANZ plans to provide a large portion of the financing. Pacific Fibre chief executive Mark Rushworth said Southern Cross — a consortium of Telecom New Zealand (5 per cent), Optus-SingTel (4 per cent) and Verizon (1 per cent) — cut its monopoly prices in New Zealand when it heard of the project. “Prices have come down in the last 12 months since we first announced to the marketplace. The exact figures are hard to tell, but I’d go in excess of 4 or 5 per cent,” Rushworth said. He said the cable would double the carrying capacity of Australia’s internet. Pacific Fibre was formed by Sam Morgan, the New Zealand entrepreneur and founder of Fairfax Media-owned Trade Me.