By RICHARD WOOD
Internet provider ihug has signed a multimillion-dollar deal to buy internet capacity from US telco Sprint.
Ihug began using Sprint for the majority of its internet traffic last week, enabling it to reduce its dependence on competitors such as Telecom.
The deal encompasses ihug's Australian operation and transtasman traffic.
Sprint, the
world's second-largest internet provider, moved into New Zealand in October, targeting internet providers and the local offices of multinationals for internet and virtual private network services.
Australia/New Zealand managing director David Eagle said this deal will give ihug more direct access to the world's internet than it has ever had. He said
Sprint carries 24 per cent of the world's internet traffic.
"Users should see increased performance, and for local businesses the world can get to you faster."
Ihug chief executive Martin Wylie said the key to the deal is the price that Sprint introduced to the market, which will help Ihug's competitiveness and profitability.
The agreement is a renewable annual deal which Wylie said will give ihug all the growth it needs for some time to come. While it does not include voice services at this stage both firms said this could be part of future business as the relationship develops.
Telecom New Zealand is also a customer of Sprint.
