Fibre link plans for Southland

By ADAM GIFFORD

A planned broadband fibre-optic cable link between Dunedin, Invercargill and Queenstown could be the first of many round the country, says a Dunedin entrepreneur.

Independent Networks has resource consents to run cable underground from Dunedin to Invercargill and on to Queenstown, with the final stage from Kinloch running underneath Lake Wakatipu.

Director Norman Dally said work laying the cable along the main highway would start in the second half of next year and should be finished by the end of the year.

"It depends on how severe the winter is."

Independent Networks will sell "dark fibre" to users, probably telecommunications companies, who will provide connections to existing or new networks.

"They have to be operating their own networks. They are not just buying bandwidth," Dally said.

"Our position is to give vendor-neutral provision of core infrastructure. The economies of scale mean telcos don't have to go through and build infrastructure right through the country. This way they can lease capacity.

"Investment in infrastructure in Southland has been almost non-existent. It is a hard business case for anyone to justify."

Early reactions from prospective customers had been positive, he said.

The likely cost of the project is $10 million to $15 million. Independent Networks will bring other non-telco investors into the scheme, but has no intention of doing a public float, as this could threaten the vendor-neutral status of the business.

"We have partners stacked up, waiting for the ducks to come in line," Dally said.

The project will be managed by his company,Martel International, whose previous experience includes project management, design and prime contracting on parts of the Cook Strait fibre-optic link project and planning for Telstra Saturn's push into Christchurch suburbs.

Dally said Independent Networks had a cost-effective model that would work elsewhere in the country.

"Other networks are planned where we believe the core infrastructure is lacking or where it is getting to its use-by date."

Steve Canny, Venture Southland's broadband project manager, said the only fibre-optic cable coming into Southland was a single Telecom link.

"If it is cut or damaged, we can't get the bandwidth we need. Every region in the modern environment needs to be looking at route diversity."

Competition was also needed to drive down prices.

"In current market models, pricing suppresses high bandwidth use because of the cost barrier," Canny said.

"That will limit our ability to do things like high-end science and research."

Bob Smith, of Woosh Wireless, which has the Probe contract to build a broadband service in Southland, said backhaul out of the province needed to be upgraded.

Woosh is buying backhaul from TelstraClear, which is using the Telecom fibre to do so.