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This is great news! At the moment, the Southern Cross cable (which is half owned by New Zealand's incumbent telco) is essentially the country's only link to th

This is great news! At the moment, the Southern Cross cable (which is half owned by New Zealand's incumbent telco) is essentially the country's only link to the rest of the Internet. They therefore charge monopoly rents. I can't find the reference right now, but I recall that a couple years ago a 155mbit/sec link between NZ and California would cost well in excess of NZ$1,000,000 _per annum_. That link running at 100% capacity 24/7 has a capacity to transfer roughly 500,000 GB per year -- meaning the cost to an ISP in New Zealand was (and certainly is still close to) NZ$2.00 per GB of data. It's no wonder that broadband there is slow, expensive, and has very limited data caps. And of course Sam Morgan and Stephen Tindall have the cash and the clout to make this happen. Good on them for stepping up to the plate and tackling the incumbents!

traskjd 17y ago
It is good news but I'm not sure they have the cash. Tindell (520m) and Morgan (250m) combined have approximately 770m (using 2007 rich list numbers which could be way off, but for arguments sake...) This falls quite short of the 900m they are estimating - even if they both pushed their whole stack. My guess - scare some incumbents (you reckon Telecom wouldn't stump up coin to own part of their only competitor when they're trying to raise cash?), get some money from Govt because of their names, and then chip some in personally along with some of their friends cash. Not saying I don't wish this would happen - just saying what they're trying to achieve will be hard and they will need A LOT of help.
- yardie 17y ago
  Investors usually don't start big projects using all of their own coin. THey'll usually put something like 30-40% to get the ball rolling. It acts as a catalyst for other investors to join in. They'll probably get the remaining 60% through private investors, hedge funds, and the government. Between the 2 of them they have more than enough money to see this project through. Since there is only one other competitor and plenty of demand this is as sure a bet as you're going to get.

traskjd 17y ago

It is good news but I'm not sure they have the cash. Tindell (520m) and Morgan (250m) combined have approximately 770m (using 2007 rich list numbers which could be way off, but for arguments sake...) This falls quite short of the 900m they are estimating - even if they both pushed their whole stack. My guess - scare some incumbents (you reckon Telecom wouldn't stump up coin to own part of their only competitor when they're trying to raise cash?), get some money from Govt because of their names, and then chip some in personally along with some of their friends cash. Not saying I don't wish this would happen - just saying what they're trying to achieve will be hard and they will need A LOT of help.

yardie 17y ago
Investors usually don't start big projects using all of their own coin. THey'll usually put something like 30-40% to get the ball rolling. It acts as a catalyst for other investors to join in. They'll probably get the remaining 60% through private investors, hedge funds, and the government. Between the 2 of them they have more than enough money to see this project through. Since there is only one other competitor and plenty of demand this is as sure a bet as you're going to get.