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BDFL
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Topic # 114408 19-Feb-2013 08:55 Send private message

Telecom, Vodafone and Telstra announced this morning that they intend to co-invest in a new Auckland-Sydney telecommunications cable.  

A press conference call is being put together for later this morning where Telecom's Chief Executive, Simon Moutter and Vodafone CEO, Russell Stanners who will elaborate on the cable announcement. 

Here is the release:


Telecom, Vodafone and Telstra announced today they have signed a non-binding memorandum of understanding (MoU) to co-invest in the construction of a new submarine cable between Auckland and Sydney.

The new cable, tentatively titled the Tasman Global Access (TGA) Cable, will significantly improve New Zealand’s international telecommunications connectivity as well as strengthen links into fast-growing Asian markets.

The total cost of the TGA cable is expected to be less than US$60 million. The cable will incorporate three fibre pairs with a current design capacity of 30 terabits per second – approximately 300 times the current internet data demand out of New Zealand.

The TGA partners expect to finalise the design within the next few months, with a likely completion date of mid to late 2014.

Telecom chief executive Simon Moutter and Vodafone New Zealand CEO Russell Stanners jointly commented: “The business case for a new cable between New Zealand and Australia is compelling, providing greater capacity and global redundancy capability. It also reflects the growing importance of trans-Tasman internet traffic: for example, around 40% of both Telecom and Vodafone’s international internet traffic is now Australia to New Zealand, versus just 10% in 2000.

“We are seeing increased data content being provided from Australia-based servers by global companies and being accessed by New Zealand internet users. An additional cable connection with Australia will strengthen the business case for international data servers to be located in New Zealand.

“The Tasman Global Access cable will also enable New Zealand to better leverage the four additional international cable systems currently serving Australia (with several more proposed or in development),  providing important redundancy for New Zealand.  Australia also enjoys good connectivity with Asia, which is achieving strong internet traffic growth in line with global economic shifts.”

Martijn Blanken, Managing Director, Telstra Global remarked, “The partnership is a great outcome for Telstra as the high capacity, low latency Tasman Global Access Cable will supply greater resilience and redundancies for carriers as well as enterprises that are located in Australia and looking for connectivity to New Zealand as well as stronger international connectivity. This cable will enable New Zealand to better leverage Australia’s much stronger internet connectivity.  It will also achieve significant international connectivity benefits for New Zealand to link with Australia, and also onwards to the USA and into Asia.

The TGA cable will achieve significant international connectivity benefits for New Zealand at a fraction of the build cost of another, much longer trans-Pacific cable, the consortium partners said.









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  Reply # 765585 19-Feb-2013 09:08 Send private message

Great news, well done for recognising where our demand for data is coming from. $60M sounds a lot cheaper than $400M for trans-Pacific

Will they reuse the landing rights for the original trans-Tasman cable or go down a whole new path?



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  Reply # 765586 19-Feb-2013 09:11 Send private message

I can ask in the call, let me know other questions...




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  Reply # 765588 19-Feb-2013 09:13 Send private message

Well another question, will they put in one (or more than one) of those junction boxes in the subsea section allowing either extra connections to NZ / AU locations or to build north into the pacific islands?

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  Reply # 765605 19-Feb-2013 10:05 Send private message

Will this have any link into the pipe networks PPC cable?
Will they be open to working with kordia?

Does telecom have any specific motivations for investing in another cable, when they have investment in the SXC which has a leg going to australia. I assume the answer would be something along the lines of wanting to have a piece of every pie.

Probably not a question for the confrence call, but does anyone know if the tasman 2 cable is used for anything other than voice?





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  Reply # 765606 19-Feb-2013 10:07 Send private message

This has the making of a cosy duopoly in international bandwidth, afterall Vodafone is Telecom's Southern Cross largest customer. The stated $US60m build cost is pocket money in Telecom and Vodafone's annual capital spend. The main driver of this business case is to make it harder for potential new entrants.

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  Reply # 765613 19-Feb-2013 10:18 Send private message

Kiwipixter: This has the making of a cosy duopoly in international bandwidth, afterall Vodafone is Telecom's Southern Cross largest customer. The stated $US60m build cost is pocket money in Telecom and Vodafone's annual capital spend. The main driver of this business case is to make it harder for potential new entrants.


Other new entrants have tried and failed, Vodafone NZ was going to be a customer of that new entrant and they signed up for a 10 year contract right at the start!

So I have no idea what why you have posted the above comment


http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10746704






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  Reply # 765616 19-Feb-2013 10:20 Send private message

Other new entrants had the wrong end of the stick. Instead of shooting for the US they should have started small, going Trans-Tasman, saved some and then build the next one.

Australian cable makes sense thanks to all CDNs and content providers coming to SYD now.




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  Reply # 765624 19-Feb-2013 10:38 Send private message

I wonder if Kim Dotcom will donate some funds for this project?




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  Reply # 765626 19-Feb-2013 10:42 Send private message

raytaylor: 

Probably not a question for the confrence call, but does anyone know if the tasman 2 cable is used for anything other than voice?



Also curious about this. Nitpicking on fantastic news, but thought it was an odd inclusion in the above map

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  Reply # 765632 19-Feb-2013 10:51 Send private message

will the new cable be lower latency than the old one?

and are there any plans to break off into melbourne or brisbane with the cost of domestic transit in australia being so high.

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  Reply # 765634 19-Feb-2013 10:52 Send private message

Was an expected result. Whats the bet this will be our only link when Southern Cross ends its life?





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  Reply # 765636 19-Feb-2013 10:54 Send private message

Zeon: Was an expected result. Whats the bet this will be our only link when Southern Cross ends its life?


They keep upgrading Southern X




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  Reply # 765638 19-Feb-2013 10:56 Send private message

johnr:
Zeon: Was an expected result. Whats the bet this will be our only link when Southern Cross ends its life?


They keep upgrading Southern X


Yes but it has a set life before its presumed to deteriorate and start breaking.







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  Reply # 765642 19-Feb-2013 11:01 Send private message

Sorry folks, got into the conference call but couldn't make it to the Q&A list - a few people posted questions and the the "owners" had to run to something else.

There is no word on who will be building the cable yet - Russel Stanners joked he might be getting a few phone calls today.

The project is current in a MoU status and it's still being setup. Initial idea is to each participant to have an equal participation in ownership of the project but that's not final yet.






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  Reply # 765669 19-Feb-2013 11:41 Send private message

From InternetNZ:


InternetNZ (Internet New Zealand Inc) welcomes today’s announcement from Telecom, Vodafone and Telstra Global that they will team up to construct a new submarine cable between Auckland and Sydney.

InternetNZ spokesperson Susan Chalmers says it is essential that New Zealand has a diverse range of international telecommunications links.

“Our main link to the global Internet is via the Southern Cross Cable. An additional cable will not only help reduce reliance on the Southern Cross, but ensure the robustness of our connectivity to the rest of the world.”

While New Zealand will benefit from having a more resilient connection to the global Internet, InternetNZ  would be wary to expect any breakthroughs in the price of international transit.

“InternetNZ would have preferred an independent consortium because the new ’TGA’ cable will be part-owned by Telecom, who already owns large interests in the Southern Cross cable. The environment will not be one that naturally encourages competitive pricing.”

Chalmers says the announcement does raise a number of questions, not least of which relate to potential regulatory oversight.  

“The location of the new cable company will be important. The headquarters of the Southern Cross Cable is in Bermuda, which handily avoids Commerce Commission oversight. InternetNZ strongly suggests that this new company be located in New Zealand.

She also points to the fact that many global sources of Internet content are diversifying from the US to Australia and Asia.

“An additional cable to Australia will  assist in the efficient delivery  of this content to New Zealand. For example,  last year cloud computing player and retail behemoth Amazon built a Content  Delivery Network (CDN) node in Sydney, bringing their content closer to New Zealanders. The shape of the Internet is changing, with content coming closer to end-users in New Zealand. This means faster delivery.”

InternetNZ looks forward to seeing more details as Telecom, Vodafone and Telstra progress and evolve their plans.







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