WELLINGTON (Reuters) - A New Zealand consortium planning a trans-Pacific high-speed telecommunications cable has scrapped the venture after failing to find sufficient backing, dealing a blow to plans to bring more broadband competition to the country.
Pacific Fibre, backed by three high profile local businessmen, in 2010 launched the $400 million fibre optic cable venture linking New Zealand, Australia and the United States, aiming to break the dominance of the Southern Cross cable, half owned by the country's main telecom firm Telecom Corp Ltd.
"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," Chairman Sam Morgan said in a statement on Wednesday, citing difficult capital markets.
New Zealand's biggest mobile phone operator, Vodafone, was an early backer of the 13,000 kilometer (8,125 mile) submarine cable.
As recently as April, Pacific Fibre had said it expected the cable to be operating by mid-July 2014.
Pacific Fibre said New Zealand businesses and consumers have been paying more than five times what Australians pay to connect to U.S. broadband networks, and their cable would have helped reduce the cost.
The New Zealand government is spending around NZ$1.5 billion over the next three years to establish a high speed internet network through most of the country.
(Reporting by Gyles Beckford; Editing by Edwina Gibbs)