The Rolling Stones once unkindly dubbed Invercargill the “arsehole of the world” – but now the town is set to turn the world on its head. The cold and rain give it an edge in building green data centres that can export cloud storage to far bigger markets.

The umbrella company behind a proposed new data centre in the South Island is planning to link it up with a new system of undersea cables, crossing untouched stretches of the South Pacific Ocean.

The Chilean government and Singapore-based company H2 Cable have issued a request for proposal on the 15,000 kilometre-long data link called the Humboldt Cable, which will directly connect Valparaiso and Sydney, with branches looping in New Zealand and even Antarctica.

H2 Cable is a subsidiary of global maritime conglomerate BW Group, which is building a data centre in Invercargill. A report by consultants Analysys Mason, commissioned by NZ Trade and Enterprise, says ‘green’ data centres like that one on 43ha at Makarewa  would have it an advantage over Tasmania in becoming a hub for export cloud computing services serving Australia, South America – and potentially even the NZ and US bases in Antarctica.

BW Digital says the project will provide capacity for New Zealand’s business sector to transition securely into the digital economy.

“The New Zealand economy, as well as many aspects of social and community life, are now heavily dependent on reliable, secure, high-speed and affordable connectivity to the rest of the world,” said BW Digital chief executive Remi Galasso.

“Submarine cables such as Humboldt have become strategic assets, which are absolutely critical if we’re to secure our economic, cultural and community success now and into the future.”
– Remi Galasso, BW Digital

He said the pandemic had shown the importance of the growing digital economy.

“Submarine cables such as Humboldt have become strategic assets, which are absolutely critical if we’re to secure our economic, cultural and community success now and into the future.”

Graeme Muller, chief executive of digital advocacy group NZTech, said the more bandwith available, the more innovation we would see.

“We don’t think twice about streaming live entertainment like the Commonwealth Games and this is only possible because we have enough connectivity through cables like these to the rest of the world,” he said. “For businesses this means we can use things like AI to offer new services to our customers in New Zealand, and we can build new services for customers around the world.”

He said new submarine cables also provided security in the event of the failure of one of the cables currently in place.

“Having a new cable like this opens up new markets more effectively for us and puts in place security so if one cable ever fails there are plenty of other connections to keep New Zealand connected to the world,” he said.

The coldest depths

It’s the first cable to cross the mammoth gulf of the South Pacific Ocean, and will join three other cables in giving New Zealand end-to-end connectivity to the rest of the world without reliance on satellite technology.

The $632 million project is the brainchild of H2 and Chilean development fund Desarollo País, which wants the cable to allow data centres and artificial intelligence to make Chile the digital leader of South America.

“We have set an ambitious goal to transform Chile into a digital hub for Latin America,” said Patricio Rey Sommer, chief executive of Desarrollo País.

Funding for the project also comes from the Japan Bank for International Co-operation and the Japan ICT Fund, two entities responsible for promoting Japanese activities abroad.

It’s a u-turn on the part of the Chilean government, which had previously approached China to assess feasibility of a telecommunications ‘bridge’ between Latin America and China.

Now it is partnering up with BW Group, which plies its trade in shipping, floating infrastructure, deepwater oil and gas production, including ownership of the largest gas-transporting fleet of ships in the world.

The exact route for the cable is being confirmed, with branches planned to link up to Invercargill and Chilean island territories like Easter Island/Rapa Nui.

A further 2000 kilometre connection will extend to Antarctica, providing the first ultrafast broadband connection to scientists and researchers stationed at Scott Base.

According to a 2021 research paper, cited by The Register, Antarctica’s Scott Base and McMurdo Station currently suffer from an extreme lack of networking capacity, “insufficient to even be considered broadband.”

The current layout of undersea cables connecting New Zealand to the wider world. Image: TeleGeography/Submarine cable map

The cable system will join others like Hawaiki Transpacific Cable, a 15,000 kilometre submarine cable connecting Australia, New Zealand, the Pacific Islands and the United States, which began in 2018.

This cable was laid by Auckland-based sub-sea cable company Hawaiki, which was acquired by BW Group affiliate BW Digital in May.

At the time, BW Digital CEO and Hawaiki founder Galasso said the group would capitalise on Hawaiki’s existing assets to build an independent, carrier-neutral digital infrastructure platform, in response to “ever-growing market requirements for international connectivity and sustainable data storage”.

The data centre at the bottom of the world

Another member of BW Group is Datagrid, developer of a forthcoming large carbon-neutral data centre in Invercargill, where the cable is set to land.

The data centre was established after a New Zealand-first agreement with the University of Otago last month, with the institution promised data-hosting space in the new facility from 2024.

“The ability to process, transfer and store enormous digital files has become increasingly vital for researchers worldwide,” said University of Otago deputy vice-chancellor Richard Blaikie. “Some of our researchers’ most data-intensive work involves MRI scans, genomics, and results from sensors at field research sites.”

Once in place, the Humboldt Cable will purportedly provide a direct link from Invercargill to South America and the Asia-Pacific region via Sydney, allowing for more cost-effective use of the centre.

Another Hawaiki-helmed cable, named Hawaiki Nui, is a 22,000 kilometre-long cable expected to be ready in 2025. Hawaiki Nui will provide yet another connection between New Zealand, Sydney, Los Angeles and Jakarta.

“Our partnership with the University of Otago also allows it to consider becoming a landing station for Hawaiki Nui, which would create a new internet gateway in Dunedin upon its scheduled completion in 2025,” said Galasso.

Going underseas to get overseas

Undersea cables have been around since the mid 19th Century, when telegraphs first traversed the seafloor of the English Channel via copper wire wrapped in a naturally-occurring latex called gutta-percha.

By the middle of last decade, 99 percent of all overseas data traffic could more accurately be described as underseas.

But most of the cables laid during the 20th Century were transatlantic, with the Pacific largely overlooked until Asian markets began to increase in significance to the global economy.

This lead to a boom in undersea cables in the Pacific, but the space between New Zealand and our far eastern neighbours in Chile has remained a blank spot on the map of global cables for years.

At the same time, Antarctica has remained the only continent not connected by cables since a Darwin-Jakarta cable was laid down in the late 19th Century – the Humboldt Cable stands to wire up some of the final empty seas.

“We look forward to working with Desarrollo Pais to realise what will become an absolutely critical piece of digital infrastructure for South America, providing unprecedented scale and quality of connectivity with the Asia Pacific and Oceania,” said Galasso.

Limited lifespans

He pointed to the Tongan eruption and ensuing tsunami at the beginning of this year as reinforcing the importance of a complete cable system.

“The recent volcanic eruption in Tonga – which broke both the country’s international and domestic cables – was a painful reminder that it is essential to have multiple cables in place.”

The Hawaiki Transpacific System was unveiled in 2018 with a promise of lasting at least 25 years, and the Humboldt Cable is being built with the same lifespan in mind.

Other cable companies are making plans for replacing their old product, with Southern Cables Limited, who controlled the bulk of the cables in and out of New Zealand for years, recently launching a new fibre cable to replace its existing system in 2030.

This newest Southern Cross cable between Los Angeles and this side of the Pacific took two years to lay down, with much of the work occurring during the pandemic.

Matthew Scott covers immigration, urban development and Auckland issues.

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