Huge subsea internet cable will 'boost South Island's digital economy'

Wednesday, 3 November 2021

Hawaiki Cable chief executive Remi Galasso says the combination of Hawaiki Nui (shown above) and the Humboldt Cable would open a new route connecting south-east Asia, Australasia and South America (video first published in December).

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

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

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

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

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The link between the South Island and Australia – which would be the only international cable connecting the South Island – would be the first to be built, and is expected to be in service by early 2024.

The Hawaiki Nui cable (shown in green) would complement the existing trans-Pacific Hawaiki cable laid in 2018 (shown in white).

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

Galasso also heads a separate business called Datagrid that is planning to build a giant data centre near Invercargill after securing a power supply deal with Meridian Energy.

He estimates the data centre will need 15 per cent less power than equivalent facilities in Auckland and Australia because of its reduced need for cooling.

Hawaiki Cable founder Remi Galasso’s drive to get NZ better connected with subsea cables has been key to creating more opportunities for hosting cloud computing services in the country.

Until now, investment in data centres in the South Island has been held back by a lack of international connectivity.

“We strongly believe in the potential of the South Island digital economy and we hope Hawaiki Nui will be a booster for the IT industry in Canterbury, Otago and Southland,” Galasso said.

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

The network appears of some geopolitical significance as it provides a still relatively direct route between Singapore and the US that avoids the potential flash point of the South China Sea.

Galasso said all five governments connected by the network had been informed of the construction plan.

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

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

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

The connection between Invercargill and Sydney would be the fastest route across the Tasman with a lag of 23 milliseconds, Galasso said.

An artist’s impression of Datagrid’s proposed data centre it plans to construct near Invercargill.

Hawaiki is in the process of being acquired by Singaporean shipping company BW Group.

Galasso said the cable venture had been approved by its new owner.

The sale of the business remains subject to regulatory approvals which he expected to come through by around April.

Galasso would not comment on the likely cost of the Hawaiki Nui cable.

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

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

“On top of that, Hawaiki Nui will cross areas of shallow water both in the Torres Straight and in Indonesia that will require armoured cable and cable burial which represents additional costs.”

Galasso said it was a “pretty large investment that will obviously require anchor customers”.

“Our discussions with the largest market players – which are all existing Hawaiki customers – are very encouraging, so we’re confident we’ll close Hawaiki Nui project funding by next year,” he said.

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

That had made New Zealand a much more attractive country in which to locate data centres, he said.

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

The Chilean government has been separately considering a subsea cable running between Chile and Asia that could also potentially be routed through the South Island.