This week’s report by UNICEF highlighted slow internet speeds as the biggest first world problem for around 80% of New Zealanders. Current infrastructure is struggling to meet the daily demands of consumers, causing network congestion.

One of New Zealand’s major infrastructure limitations is the international cable that links our internet and telecommunications network to Australia and other international hubs in the western United States. This Southern Cross cable is the only source of inbound and outbound international data traffic to New Zealand.

The government’s response has been to build a national ultra-fast fibre (UFB) network directly to the home with the potential to deliver 100Mbps downstream and 10Mbps upstream. The technology is expected to significantly increase internet speed and quality, but this improvement could be short-lived if no improvement is achieved on New Zealand's international data links.

The problem with building a massive UFB network is that without investing in an additional international cable, the government is effectively developing an ‘NZ Inc’ corporate intranet. This will mean almost instantaneous access to sites that are hosted and cached (stored) in New Zealand, but there will still be a lag for overseas content.

In the medium to long term, however, New Zealand will still face pre-UFB constraints and issues unless we invest in a second international cable.

A second international cable would significantly reduce the bottleneck in the Southern Cross cable, making NZ-based businesses more competitive with overseas companies, particularly in the film, medical and scientific industries.

Second, it would create competition in the market for wholesale international bandwidth, which would result in cheaper broadband and more data for individuals and businesses.

Third, it would provide New Zealand with a second layer of protection if a natural disaster terminates the two links connecting New Zealand to the Southern Cross cable. If these are terminated, New Zealand would have limited access to international telecommunication services.

Though we all home that UFB will eventually deliver productivity dividends an extra international cable would make such benefits more likely.