The project, which would have challenged the dominance of Telecom New Zealand and SingTel-owned Southern Cross Cable, received backing from Vodafone after launching in March 2010.
The cancellation of the project comes despite encouraging early momentum, according to Pacific Fibre chairman Sam Morgan, who said that the company had believed funding for long term infrastructure investments would have been more readily available.
“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.”
One of the main goals of the cable was to reduce the cost of bandwidth from New Zealand to the US, which according to research firm Market Clarity, is 5.8 times higher than the price paid by Australians.
“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,” said Rod Drury, co-founder and director of Pacific Fibre.
Drury also criticised plans by the New Zealand government to build a NZ$1.5 billion high speed internet network while bandwidth pricing in the country is still so high.
Shareholders, customers and partners of Pacific Fibre included TE Subcom, Vodafone, REANNZ and iiNet
