Massive Undersea Internet Cable Will Boost South Island’s Digital Economy

The South Island will be connected to the United States, Australia and Asia via one of the world’s longest and highest-capacity submarine internet cables, under a plan that could boost the country’s IT industry.

The 22,000 km cable would connect Invercargill, Dunedin and Christchurch with Los Angeles, Singapore and Jakarta, with connections to Sydney, Melbourne, Brisbane, Darwin, Batam in Indonesia and Hawaii.

Auckland-based Hawaiki Cable, which is behind the venture, expects to begin construction on the Hawaiki Nui cable network next year, with the project set to be completed by 2025.

The plan appears well advanced, with the five governments where the cable would land aware of the project and three potential suppliers invited to bid to produce the cable.

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The South Island-Australia link – the only international cable connecting the South Island – was to be constructed first and is expected to be commissioned in early 2024.

Hawaiki chairman Remi Galasso said one of the goals was to enable the South Island to become a large, international “vault” for computer data, taking advantage of its cool climate and renewable energy.

Galasso also heads a separate company called Datagrid, which plans to build a massive data center near Invercargill after signing a power supply deal with Meridian Energy.

He estimates that the data center will require 15 percent less power than comparable facilities in Auckland and Australia due to the reduced need for cooling.

Until now, investments in data centers in the South Island have been held back by a lack of international connectivity.

“We strongly believe in the potential of the South Island’s digital economy and we hope that Hawaiki Nui will drive the IT industry in Canterbury, Otago and Southland,” said Galasso.

The Hawaiki Nui Cable (shown in green) is said to complement the existing trans-Pacific Hawaiki Cable laid in 2018 (shown in white).


The Hawaiki Nui Cable (shown in green) is said to complement the existing trans-Pacific Hawaiki Cable laid in 2018 (shown in white).

“Hawaiki Nui connecting Christchurch, Dunedin and Invercargill to Australia will be a very strategic infrastructure for Datagrid.”

The network appears to be of some geopolitical importance as it still provides a relatively direct route between Singapore and the US that avoids the potential flashpoint of the South China Sea.

Galasso said all five governments connected through the network were aware of the construction plan.

Indonesian telco Moratelindo has agreed to work with Hawaiki to manage permits for its landing stations there, and Indonesia’s Ministry of ICT has issued a statement in support of the plan.

Remi Galasso, co-founder of Datagrid, says the cable network will be one of the first to use a new technology to carry more data.


Remi Galasso, co-founder of Datagrid, says the cable network will be one of the first to use a new technology to carry more data.

The cable network will use a new technology called spatial division multiplexing (SDM), which will allow it to carry 12 pairs of optical fibers and have a capacity of 240 terabits per second (Tbps) on some segments.

The link between Invercargill and Australia will feature four fiber pairs with a total capacity of 80 Tbps – enough to increase New Zealand’s total international communications capacity by more than a third.

The link between Invercargill and Sydney would be the fastest route across the Tasman with a 23 millisecond delay, Galasso said.

Hawaiki is currently being acquired by the Singaporean shipping company BW Group.

Galasso said the cable company had been approved by the new owner.

The sale of the company remains subject to regulatory approvals, which are expected to close around April.

Galasso declined to comment on the likely cost of the Hawaiki Nui cable.

Hawaiki currently owns a 15,000 km submarine cable connecting Oregon, Auckland and Sydney, which it built in 2018 at a cost of US$350 million (NZ$494 million).

“Hawaiki Nui will be more expensive, firstly because the system is much longer and secondly because the cable will have more fiber pairs thanks to the brand new SDM technology,” said Galasso.

“In addition, Hawaiki Nui will traverse areas of shallow water, both in the Torres Straight and Indonesia, which will require armored cables and cable trenches, which will incur additional costs.”

An artist's impression of Datagrid's proposed data center it plans to build near Invercargill.


An artist’s impression of Datagrid’s proposed data center it plans to build near Invercargill.

Galasso said it was a “pretty big investment that obviously requires anchor customers”.

“Our discussions with the largest market players – all existing Hawaiki customers – are very encouraging, so we are confident that we will close funding for the Hawaiki Nui project next year,” he said.

The price of international Internet connections to and from New Zealand had more than halved since Hawaiki broke the Southern Cross Cable’s monopoly on the US route, he said.

That would have made New Zealand a much more attractive country to establish data centers, he said.

“New Zealand is a country of innovation and I have no doubt that the IT industry will become a leader in Asia-Pacific.”

The Chilean government is separately considering a submarine cable between Chile and Asia that could potentially also be laid via the South Island.

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