High speed Internet plays a vital role in global business, and in New Zealand and Australia that Internet largely arrived in 1999 and 2000 with the Sea-Me-We3 Cable connecting Australia from the west, and the Southern Cross Cable from the east connecting both countries to the US from the east. In New Zealand’s case, that one cable still supplies the majority of the country’s bandwidth, while Australia has diversified.

virtual team - Internet at the bottom of the world

In the modern world, Internet accessibility is as important to a country’s business success as a seaport would have been a few centuries ago. We don’t really think about the fact that the data your browser is loading right now has to physically travel half way around the world and back, through cables that someone had to lay to make the world wide web… world wide.

Fast, reliable Internet services are non-negotiably necessary for most businesses today, and not just for financial firms that rely on super-fast data to make up-to-the-microsecond stock and currency trades. Small and large businesses rely on the Internet to communicate with partner organisations, handle electronic payments, run e-commerce stores, market their brand and their products, and communicate with the public and their customers.

Businesses lacking these abilities or trying to make do with pre-Internet methods would be totally unable to compete on an international scale. Without great Internet service, growing businesses would be forced to relocate to better-connected areas, and an entire country’s economy would become relatively isolated.

The Southern Cross cable

These ideas aren’t just theoretical. Since our Internet service is provided by a variety of Internet Service Providers (ISPs), we generally think of Internet access as ubiquitous and redundantly available, but it’s much more tenuous than most of us think.

The ISPs we use typically share bandwidth with each other on just a few large physical cables that are owned by a handful of major businesses. New Zealand receives the lion’s share of its bandwidth from the Southern Cross Cable, which was finished in 2000. While New Zealand had Internet access before this point via a low-volume trans-Tasman cable, this relatively new and reliable high-volume cable is ultimately what connected the country to an increasingly globalising economy by directly linking New Zealand to the West via the US, and to the East via Australia’s already more developed network.

Australia also started out with just two real broadband cables at the turn of the century, but has since diversified those connections significantly more than New Zealand has. While other factors were also at play, it’s noteworthy that both countries’ GDPs spiked as soon as these initial cables were laid, and since 2000 both countries have seen a total growth of well over 300%. This is due, in part, to the energising effect that global interconnectedness has had on small and large businesses.

New Zealand especially has relied heavily on the one Soutehrn Cross cable for the past 16 years, which makes the country vulnerable to partial Internet blackouts due to any number of issues, such as earthquakes, accidental damage by fishing vessels, or sabotage. Fortunately, there are several projects underway to create more redundancy in the system.

The Internet is diversifying

Announced in 2013, the Hawaiki submarine cable is set to go online in the second quarter of 2018 to offer faster, better service in New Zealand and Eastern Australia. Additionally, Southern Cross Cable confirmed their Southern Cross NEXT project recently, for which they’ll lay their third trans-pacific cable from the US to New Zealand and Australia by 2020.

More cables is great news for Aussies and Kiwis, because it means higher bandwidths for lower prices, and more globally competitive rates for businesses that have to shift large volumes of data.

What comes next?

The Internet is the lifeblood of the 21st century’s globalised economy, and our submarine cables are the arteries that keep it flowing. To ensure that we remain competitive going forward it’s vital that we reach and stay on the cutting edge of global information technology and innovation. To diversify further, New Zealand might next be looking to benefit by following Australia’s example and building better connections with Southeast Asia and Africa.

As the world becomes increasingly interconnected, distance to other major economic centres in Asia, Europe, and America will become less significant barriers to business, and offer ever more opportunities for sustained economic growth for us at the bottom of the world.

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