Pacific Fibre, our knights in cable armour, have called it quits, citing an inability to raise the US$400m required to fund the cable build.
Pacific Fibre launched in 2010 and planned to build a 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,” said chairman Sam Morgan in a statement this afternoon.
“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.”
Morgan said Pacific Fibre enjoyed some early momentum and believed funding would have been more readily available.
“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.”
Co-founder and director Rod Drury said: "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."
“We still cannot see how the government’s investment in UFB makes sense until the price of international bandwidth is greatly reduced.”
He previously told Idealog that New Zealanders were missing out on business and social opportunities due to the state of our broadband. “I’m doing this because I just want the end service."
Pacific Fibre had expected to deliver the goods from 2013. US-based cable company TE SubCom was to build, design and lay the cable, while Pacific Fibre had signed Vodafone, REANNZ and Australia's iiNet as customers.
Pacific Fibre had the backing of Peter Thiel, whose New Zealand investment fund Valar Ventures was a shareholder.
Last year Matt Crockett, a former Telecom executive who served on the board of Southern Cross, told Idealog that Pacific Fibre faced a "whole bunch of challenges".
"I personally think the Australia and New Zealand market is pretty well served in terms of international capacity ... I’m not quite sure where [Pacific Fibre] is going to get the kind of scale of demand that they would need to make this work. They’ve talked about differentiation with latency and all of that but the latency differences they’re talking about are trivial and will make no real difference.”