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Spark, Voda and Telstra to spend US$70 million on trans-Tasman cable

Spark New Zealand and Vodafone, New Zealand's two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world.

The new Tasman Global Access Cable will boost broadband connections between the two countries, with Spark investing US$32 million in the project, due to start next year, the three telcos said in a joint statement. Alcatel-Lucent was chosen in the tender process to lay the cable, which is expected to be providing traffic data by mid-2016.

The new cable will bolster New Zealand's connectivity to Australia, to accommodate growing internet traffic across the Tasman, which has grown to 40 percent of total international traffic, from just 10 percent in 2000. Meanwhile trans-Pacific traffic has declined to 60 percent of international traffic, from 90 percent in 2000, the companies said in the statement.

"As well as strengthened links into fast-growing Asian markets, the TGA Cable will enable New Zealand to better leverage the five main international cable systems currently serving Australia, and deliver important redundancy for New Zealand," Simon Moutter, Spark managing director and Russell Stanners, Vodafone chief executive, said. "We are seeing increased data content being provided from Australia-based servers by global companies and being accessed by New Zealand internet users.

"An additional cable connection with Australia will strengthen the business case for international data servers to be located in New Zealand and improve access for Australian and other international businesses to New Zealand," Moutter and Stanners said.

The cable will stretch from Raglan, on the West Coast of the North Island to Telstra's landing station at Oxford Falls in Sydney.

Shares of Spark rose 0.3 percent to $3.125 and have gained 35 percent since the start of the year.