Kordia duly hooked up with Australia’s Pipe Networks, slated to be its joint venture partner in its trans-Tasman cable venture. Pipe Networks is already laying sub-marine fibre optic cable from Sydney to Guam to the US, a project which will be completed around the middle of the year.

Pipe Networks’ plans include a 150km branch of fibre from Sydney, which is designed to accommodate a new leg of cable to be laid to Auckland. But lenders ANZ and Westpac pulled out in early December last year, citing the credit crunch. Just before Christmas, Pipe Networks stitched together a deal involving vendor financing from Tyco (the company that will make the fibre) and an unnamed anchor customer. Pipe Networks will now begin building the Trans-Pacific leg of its new cable up to Guam.

Pipe Networks now seems sorted. Under the company’s alliance, it is responsible for the leg to the US, while Kordia must find 100% of the estimated $200 million required to build the trans-Tasman leg. Kordia CEO Geoff Hunt says that after borrowing to buy Orcon for $24 million and after other outlays over the past two years, the SOE is already more than 50% geared, so is not in a position to hit up banks, credit crunch or no.

Instead, Hunt will seek funding from anchor customers or the government, and says he’s open to some of the government’s $1.5 billion broadband infrastructure going toward the second trans-Tasman cable. He sees the submarine cable as one of three critical broadband problems, the other two being regional broadband infrastructure (which he’s also keen for Kordia to address, again possibly using some of the $1.5 billion) and the third the well-canvassed fibre-to-the-home issue. If Hunt succeeds and Pipe Networks starts to lay the trans-Tasman cable this year, Kordia expects it to be ready for testing in 2011.

Through air
Analyst Paul Winton says wireless internet options will forever be relegated to a secondary role, helping to fill gaps in landline networks. He says there are some interesting ‘near-range’ technologies, such as gigabit wireless and ultrawideband. But he doesn’t see WiMax – the best-known wireless network technology – as ever stepping up to become a full-blooded alternative to fibre optic cable.

Although WiMax, a pumped-up version of wi-fi, can throw a wireless broadband signal up to 10km, “there are simply mathematical limits to the amount of data it can transmit”, says Winton. Only fibre can cope with a world of on-demand TV delivered via the internet, videoconferencing and other multimedia-intensive applications in the years ahead.

Some industry wonks may disagree with Winton. In the US, A-list telco Sprint has started a major WiMax build, and Google and others are lining up to bid for the large chunks of spectrum freed up in February by the US networks’ move to digital-only broadcasts. The date for New Zealand’s analogue TV switch off, which will also free up large chunks of spectrum for wireless internet, will be decided in 2011.

Regardless, the debate is academic here. Kordia once harboured major WiMax ambitions, envisioning a wireless network that could challenge Telecom’s landline monopoly. But Hunt says Kordia’s high debt means it will prioritise regional infrastructure projects and its trans-Tasman cable project. Any WiMax investment is off the table for the foreseeable future.

CallPlus and rival Woosh have also nursed plans for national WiMax networks. But CallPlus’s WiMax network has been stalled since inception in Whangerei, and Woosh has been looking for months for an investor with $150 million to expand its own WiMax network, currently restricted to Hamilton.

With WiMax stalled, attention turns to Telecom’s new 3G network launching in June. Its HSPA+ technology will support wireless cellular broadband connections at speeds faster than almost anybody’s landline today. However, there are a couple of catches. One, to date there are no cellphones around that support HSPA+ (the reason Vodafone gives for not supporting the technology yet). Two, cellular data is charged at nosebleed rates even today, and Telecom and Vodafone will want to recoup more cash after they finish upgrading their respective 3G networks mid-year.

More and more people will access the internet through an iPhone, a Google Android device or another smartphone, but don’t look for cellular network upgrades to challenge landlines any time in the next half decade. Whoever Joyce and English end up giving their money to, fibre will rule.