Vodafone's New Zealand subsidiary has confirmed plans to move all international capacity to submarine cable contender Pacific Fibre, replacing current arrangements with rival Southern Cross by 2014.
The ten-year deal came as a crucial vote of confidence in the new cable, which planned to link Sydney, Auckland and Los Angeles 10.24 terabits per second of bandwidth at full capacity.
Vodafone NZ chief executive Russell Stanners said the deal was worth "a nine figure sum". The country's largest mobile carrier currently purchases international transit through Southern Cross Cables.
A spokesperson for the telco said the company would not renew the arrangements when they lapsed in 2014.
"We're switching over to Pacific Fibre," the spokesperson said.
"This deal gives us a lot more capacity than what we have now – multiples more."
iTnews believes Vodafone NZ's current capacity on Southern Cross is similar to that of competing service provider TelstraClear, at between 12 and 15 Gbps.
Vodafone NZ's contracted capacity on the Pacific Fibre cable is expected to grow to more than 100 Gbps over the course of the ten-year deal.
Southern Cross Cables sales manager Ross Pfeffer labelled the practice of placing all capacity requirements on a single, un-protected submarine cable as "commercially irresponsible".
According to Pfeffer, global availability for single-strand submarine cables averaged 98 per cent with repairs to cable breaks often taking seven to 25 days depending on weather and location.
Pacific Fibre has already signed up iiNet and the New Zealand academic network REANNZ as anchor tenants for the cable.
The deal with REANNZ, valued at $NZ91 million ($AU71 million), would provide a starting capacity of 40 Gbps and would grow to between 120 and 160 Gbps throughout the term.
The capacity was for REANNZ's exclusive use and could not be wholesaled.
REANNZ chief executive Donald Clark said the deal was worth more than $NZ400 million ($AU314 million) at current market rates.
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