The Pacific Fibre board today resolved to cease operations, citing an inability to raise the NZ$400m required to fund the cable build.
Pacific Fibre launched in March 2010 and planned to build a 13,000km high-speed fibre-optic cable connecting New Zealand and Australia to California.
“A 13,000km cable is clearly an audacious thing to try and do. We were fortunate to find supportive shareholders, fantastic staff and early customer support from the likes of REANNZ and Vodafone” said chairman Sam Morgan.
“We’ve spent millions of shareholder funds trying to get this done and despite getting some good investor support we have not been able to find the level of investment required in New Zealand initially and more broadly offshore.”
“The global investment market is undoubtedly difficult at the moment but we knew this was always going to be hard, regardless of our timing.”
“We started Pacific Fibre because we know how important it is to connect New Zealanders to global markets. The high cost of broadband in New Zealand makes it hard to connect globally and it is this market failure, not a technical failure, that we tried hard to solve” said co-founder and director Rod Drury.
“We still cannot see how the government’s investment in UFB makes sense until the price of international bandwidth is greatly reduced” said Mr Drury.
In September 2011, the Australian telecommunication research company Market Clarity reported the cost of bandwidth to the U.S. from New Zealand as 5.8 times greater than the price paid by Australians.
“This project had encouraging early momentum and we were pleased to attract a great team and board, and shareholders who invested because they felt passionately that this problem needs solving for New Zealand”, said Mr Morgan. We believed funding for these long term infrastructure investments would have been more readily available and were confident the business case was solid.”
“We feel like we’ve done everything we can to succeed and we are all hugely disappointed that we have not managed to get there.”
“We’d like to thank our staff, shareholders, customers, partners and supporters”, Mr Morgan ended.