New subsea cable system planned between New Zealand and Australia

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Part of US$500 million South Island hyperscale data centre build.

Connectivity between Australia and New Zealand could receive a further capacity boost after plans for a new data centre build and cable system were revealed today.

A cable system connecting New Zealand's southernmost city of Invercargill with Sydney and Melbourne is part of a US$500 million (A$663.5 million) project by to build a 60 megaWatt, 25,000 square metre hyperscale data centre called Datagrid.

The cable system will connect to the Hawaiki circuit in Mangawhai in the North Island for onward international connectivity.

Depending on demand and additional funding, a 4300 kilometre extension to the cable from Invercargill to the McMurdo Station in Antarctica is possible.

Trans-Tasman latency for the new cable system is expected to be around 24 milliseconds, as Invercargill is closer to Australia than New Zealand's largest city of Auckland.

The location for Datagrid is Makarewa, near Invercargill, with the capacity to scale up to 100 MW and 40,000 square metres of space.

Seeking to capitalise on renewable power that's said to be 15 percent cheaper than in Australia - home to all the region's hyperscale data centres currently, the Datagrid project is driven by Hawaiki Cable founder Remi Galasso and telco veteran Malcom Dick.

Galasso said Datagrid wants to emulate Iceland's success in attracting data centre builds, taking advantage of the South Island's cooler climes and proximity to renewable energy generation.

With the latency being well below the 35 ms threshold considered as an acceptable delay in the cloud industry, Galasso said the new data centre and cables target a serviceable market of 20 million people in Victoria, New South Wales, parts of Queensland and New Zealand.

He added that a branching unit is proposed to Hobart.

The cable itself is designed to have four fibre pairs on the Invercargill to Sydney leg. Between Sydney and Melbourne, the cable will have 16 fibre pairs, and 13 ms latency.

Galasso said the cable system is expected to enter service in 2023.

New Under Sea Cable for Australia and NZ