Lance Wiggs has a very good explanation of the hurdles any attempt to resurrect the Pacific Fibre project will have to overcome. He outlines the extremely risk-averse guarantees institutional investors want, the enormous amount of due diligence required and impact of the TelstraClear sale to Vodafone.
Kim Dotcom obviously loves the media attention. Offering to use his own money to finance Pacific Fibre is definitely an attention seeking statement. But does Kim Dotcom have the US$300 million Lance Wiggs estimates is necessary to complete the project?
Putting aside the fact that his assets are currently frozen, what is the likelihood of his new “Mega” project being the victim of US “guilty until proven innocent” seize? How credible are any commitments he would make to such a large infrastructure project?
Pacific Fibre shopped the prospectus to a large number of local and foreign investors. Some of those, perhaps government owned funds, may be regretting their decisions, but all will be far better informed for new player conversations. I believe those conversations need to be far deeper and collaborative – we are all in this together.
While it is encouraging to have a private investor offer to plug the financing gap, does the Kim Dotcom saga make it more likely or less likely that landing rights in the USA would be granted? Somehow I think there would be enormous opposition from Hollywood lobbyists on the US end.
It is very disappointing that institutional investors in New Zealand did not catch on to the enormous possiblities that Pacific Fibre could bring. International data is currently the major bottleneck that needs to be overcome. The Crown Fibre project will be for nothing if data transfer slows to a trickle as soon as international data is accessed.
Pacific Fibre II would be the ideal investment for the likes of the ACC fund or NZ Super Fund. Hell, if I was an NBR Rich Lister I would bet the farm on entering a duopoly with enormous demand increasing year-on-year at incredible rates.