Three major telco providers have announced plans to build a new data cable from Auckland to Sydney.
Telecom, Vodafone and Telstra have signed a non-binding agreement to co-invest in the new Tasman Global Access (TGA) Cable, which they say will significantly improve New Zealand's international telecommunications connectivity and strengthen links into Asian markets.
The cable - the fourth linking the two countries - is expected to cost less than $US60 million ($NZ70.9m) and will have a capacity of 30 terabits per second - 300 times the current internet data demand out of New Zealand.
The three telcos say they expect to finalise the design within the next few months, and complete the cable in mid to late 2014.
About 40 per cent of Telecom and Vodafone's international internet traffic is Australia to New Zealand, compared with just 10 per cent in 2000.
'We are seeing increased data content being provided from Australia-based servers by global companies and being accessed by New Zealand internet users,' Telecom and Vodafone said in a joint statement.
'An additional cable connection with Australia will strengthen the business case for international data servers to be located in New Zealand.'
It will also help New Zealand better leverage the four additional international cable systems serving Australia, and several more which are proposed or in development, including with Asia.
The announcement follows renewed discussions late last year about building a second cable linking New Zealand to the United States.
In December, the Green Party announced a new policy of a $100m, one-quarter cornerstone investment for the broadband link with Australia and the US for faster and cheaper internet access.
Greens co-leader Russel Norman says without the second cable, the government's $1.5 billion ultra-fast broadband scheme will be undermined.
The policy has the support of Lance Wiggs, one of the founders of the Pacific Fibre cable project which was abandoned in August last year, while internet mogul Kim Dotcom has also offered to invest in the second cable.