Southern Cross announces further 20% capacity prices reduction

Forums › New Zealand Broadband › Southern Cross announces further 20% capacity prices reduction

1 | 2

insane

3240 posts

Uber Geek

ID Verified

Trusted

#745390 15-Jan-2013 22:55

jpollock:

port price - fixed per customer/month, mostly sunk cost on TCL.
national backhaul - slightly marginal, mostly sunk (their own network)
network equipment - slightly marginal, mostly sunk (their own equipment)
systems - fixed
staffing - largely fixed, if your costs are anywhere near linear in data transferred instead of customers on your network, you are doing it wrong.
office - fixed (same as staffing).
marketing - fixed (same as staffing).

So, where's the marginal cost per unit of traffic? Where is the cost that you wouldn't have to pay if you didn't transfer the traffic?

Well as for as the ports are concerned TCL still don't get that free just because they have some LLU gear, there is still a very real price associated with the last mile

National backhaul, sure they have a network which spans the country, but it's not all TCL fiber in the ground, they use other providers for segments.

Network equipment, this needs to scale with demand so there is a direct cost associated with wrangling more traffic through the network.

But to reiterate, a percentage drop in the costs of one small part of the overall cost to deliver the service, will not come across as a major reduction in overall price, especially when there are still 100,000+ customers willing to pay what they do.

You just have to look around at other ISPs to see what they could offer data at lower rates IF they wanted to, however giving something away when people are willing to pay for it is not great business.

If you feel so wronged by the way an ISP runs their operation then your only real choice is to vote with your feet.

jpollock

600 posts

Ultimate Geek

Trusted

#745391 15-Jan-2013 23:07

insane:

Well as for as the ports are concerned TCL still don't get that free just because they have some LLU gear, there is still a very real price associated with the last mile

It's their own HFC network. The costs are sunk, and not repeating.

insane:

If you feel so wronged by the way an ISP runs their operation then your only real choice is to vote with your feet.

Actually, it isn't. I can raise enough bad press that other people leave pushing down prices. I can solicit the government for additional legislation to bring down broadband pricing.

I have choices other than simply changing suppliers. :)

---
http://blog.jason.pollock.ca

Zeon

3916 posts

Uber Geek

Trusted

#745394 15-Jan-2013 23:12

jpollock:
insane:

Well as for as the ports are concerned TCL still don't get that free just because they have some LLU gear, there is still a very real price associated with the last mile

It's their own HFC network. The costs are sunk, and not repeating.

insane:

If you feel so wronged by the way an ISP runs their operation then your only real choice is to vote with your feet.

Actually, it isn't. I can raise enough bad press that other people leave pushing down prices. I can solicit the government for additional legislation to bring down broadband pricing.

I have choices other than simply changing suppliers. :)

Haha my suggestion would be to go and start an ISP and see how things stack up then report back to this thread a year later :p. Lots of people here work for ISPs and know how the cost structure is. You will likely see a continuation of larger datacaps at the same price if anything, but only over a period of time.

For the most part, ISPs are in a very competitive business with very little profit. I don't see how government legislation can have a major affect pricing unless perhaps they decreased port costs or perhaps cut minimum wage/compliance costs.

Speedtest 2019-10-14

insane

3240 posts

Uber Geek

ID Verified

Trusted

#745396 15-Jan-2013 23:21

jpollock:
insane:

Well as for as the ports are concerned TCL still don't get that free just because they have some LLU gear, there is still a very real price associated with the last mile

It's their own HFC network. The costs are sunk, and not repeating.

insane:

If you feel so wronged by the way an ISP runs their operation then your only real choice is to vote with your feet.

Actually, it isn't. I can raise enough bad press that other people leave pushing down prices. I can solicit the government for additional legislation to bring down broadband pricing.

I have choices other than simply changing suppliers. :)

Their HFC network only covers parts of Wellington, Christchurch and Kapiti.... there is still the rest of the country to consider.

I've been involved with creating broadband plans for an NZ ISP, I know the full cost breakdown as would anyone else who's done the same.

I look forward to seeing your efforts in the herald, they seem to public anything these days so you may have a chance ;)

mercutio

1392 posts

Uber Geek

#745445 16-Jan-2013 07:47

jpollock:
insane:

Well as for as the ports are concerned TCL still don't get that free just because they have some LLU gear, there is still a very real price associated with the last mile

It's their own HFC network. The costs are sunk, and not repeating.

insane:

If you feel so wronged by the way an ISP runs their operation then your only real choice is to vote with your feet.

Actually, it isn't. I can raise enough bad press that other people leave pushing down prices. I can solicit the government for additional legislation to bring down broadband pricing.

I have choices other than simply changing suppliers. :)

i for one don't want cheaper prices as much as I want a higher level of service.

The government has just determined to "very slightly" reduce ADSL costs, not at all in line with the recommendations put through to them. There's a very significant cost of ADSL connections themselves in NZ, especially at the lower end.

mercutio

1392 posts

Uber Geek

#745446 16-Jan-2013 07:50

So I was reading about SEA-ME-WE 3 cable cut. And apparently it's going to take a month to fix.

For some reason everyone focuses on the Southern Cross cable. But there's also significant bandwidth out of Australia not using the Southern Cross. And at least Southern Cross has redundancy.

freitasm

BDFL - Memuneh
79289 posts

Uber Geek

Administrator

ID Verified

Trusted

Geekzone

Lifetime subscriber

#745448 16-Jan-2013 07:54

insane:
jpollock: It's their own HFC network. The costs are sunk, and not repeating.

Their HFC network only covers parts of Wellington, Christchurch and Kapiti.... there is still the rest of the country to consider.

TelstraClear is the second largest ISP in the country. Their HFC network is only part of it, they have a large ULL network and I'd think their cable customers are not the majority.

Quic Broadband

Move to New Zealand's best fibre broadband service (affiliate link). Free setup code: R587125ERQ6VE. Note that to use Quic Broadband you must be comfortable with configuring your own router.

sbiddle

30853 posts

Uber Geek

Retired Mod

Trusted

Biddle Corp

Lifetime subscriber

#745449 16-Jan-2013 07:55

mercutio: So I was reading about SEA-ME-WE 3 cable cut. And apparently it's going to take a month to fix.

For some reason everyone focuses on the Southern Cross cable. But there's also significant bandwidth out of Australia not using the Southern Cross. And at least Southern Cross has redundancy.

It annoys me more and more every time I see somebody calling for another NZ<->US cable and believing it's going to magically deliver us $9.99 p/m flat rate 100Mbps internet.

While connectivity to the US and beyond is important, connectivity to Australia is becoming more and more important due to the huge growing presence of CDN's and hosting in Australia. With AWS now in Sydney as well we're going to see yet more growth in traffic heading West from NZ rather than East.

mercutio

1392 posts

Uber Geek

#745455 16-Jan-2013 08:05

sbiddle:
mercutio: So I was reading about SEA-ME-WE 3 cable cut. And apparently it's going to take a month to fix.

For some reason everyone focuses on the Southern Cross cable. But there's also significant bandwidth out of Australia not using the Southern Cross. And at least Southern Cross has redundancy.

It annoys me more and more every time I see somebody calling for another NZ<->US cable and believing it's going to magically deliver us $9.99 p/m flat rate 100Mbps internet.

While connectivity to the US and beyond is important, connectivity to Australia is becoming more and more important due to the huge growing presence of CDN's and hosting in Australia. With AWS now in Sydney as well we're going to see yet more growth in traffic heading West from NZ rather than East.

Well the SEA-ME-WE 3 cable cut issue wouldn't be improved by another connection to Australia.

Personally I'd like to have more than 1 megabit upload speed on a residential connection to NZ, at least 20 megabit connection etc. But in the interim, I don't want to lose the ADSL speeds I have!

My main concern is that with providers like pipenetworks who route all their traffic a very long way to the US, internet performance would degrade further.

But that doesn't stop me thinking that routing to Japan, Singapore, and Hong Kong via Australia makes a LOT more sense than routing via the US to these destinations.

Anyway, as much as our internet is sub-optimal, it's worse in countries like Pakistan, South Africa, Chile etc.

And they don't have nearly the same cable distances required.

1 | 2