Telecom, Vodafone and Telstra to invest in new Aucklad- Sydney cable

Forums › New Zealand Broadband › Telecom, Vodafone and Telstra to invest in new Aucklad- Sydney cable

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Master Geek
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#766522 20-Feb-2013 15:49

hamish225: they should land it somewhere thats not auckland. I know thats where most of the population is but what about somewhere around wellington?

if auckland had some kind of natural or man made disaster then that would be the end of outside communication accept for those with satellite internet.

For a trans Pacific cable, such as Southern Cross, Auckland is good because you can land the Oz facing cable on one side of a narrow isthmus and the Pacific facing cable on the other, and have access to Auckland. However, for an Oz-only facing cable, somewhere further south would be a very good idea.

If you are going to do that, it would be a great idea to also move the Sydney link down to Wollongong or some such, thus avoiding the single point of failure where, as I understand it every cable enters Port Jackson.

DonGould

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#766591 20-Feb-2013 17:15

michaeln: If you are going to do that, it would be a great idea to also move the Sydney link down to Wollongong or some such, thus avoiding the single point of failure where, as I understand it every cable enters Port Jackson.

What is transit from Wollongong to Sydney worth and is there enough spare capacity in the networks to move 30Tb?

...or are you suggesting that the CDNs we want to talk to will be moved to Wollongong too?

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Jaxar

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#766594 20-Feb-2013 17:33

If the government current or previous is not prepared to invest and other commercial interests are not prepared to invest should TAG be stopped and we not have an additional cable?

I'm not arguing the validity of any raised concerns but do the concerns justify to the geekzone community leaving it as the status quo?

Please note: I have a professional bias towards Vodafone.

ajobbins

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#766598 20-Feb-2013 17:40

Jaxar: If the government current or previous is not prepared to invest and other commercial interests are not prepared to invest should TAG be stopped and we not have an additional cable?

I'm not arguing the validity of any raised concerns but do the concerns justify to the geekzone community leaving it as the status quo?

The idea of a second cable would be to increase price competition. There is PLENTY of capacity now on SX and for well into the future. The argument is that because Telecom will partially own both, and that the cables will effectively be owned by the three biggest players, it wont drive prices down.

Telecom and Vodafone will have a lot of power in the market by basically owning international capacity. Any other ISP who wants bandwidth has to buy off their competitor at whatever price said competitor decides to set.

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DonGould

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#766602 20-Feb-2013 17:46

ajobbins:
The idea of a second cable would be to increase price competition. There is PLENTY of capacity now on SX and for well into the future. The argument is that because Telecom will partially own both, and that the cables will effectively be owned by the three biggest players, it wont drive prices down.

Telecom and Vodafone will have a lot of power in the market by basically owning international capacity. Any other ISP who wants bandwidth has to buy off their competitor at whatever price said competitor decides to set.

Sure, so the stage is set for a third provider in the market.

This one is clearly going to land in Auckland. We all know that the gap in the market is landing a new cable in Nelson.

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ajobbins

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#766604 20-Feb-2013 17:53

DonGould: Sure, so the stage is set for a third provider in the market.

Not sure if you are serious or not. I don't think there is an appetite for a 3rd cable. I think investors will be put off as having two cables already created additional risk to the business model.

DonGould:This one is clearly going to land in Auckland. We all know that the gap in the market is landing a new cable in Nelson.

Again, not sure if you are kidding? Why would you land a cable in Nelson when the vast bulk of traffic is in the North Island. You have to then trunk that taffic back up to the NI at greater cost.

If there is a disaster in Auckland big enough to take out cables at multiple landing points, then internet access might be the least of your worries.

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DonGould

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#766610 20-Feb-2013 18:25

ajobbins: Not sure if you are serious or not. I don't think there is an appetite for a 3rd cable. I think investors will be put off as having two cables already created additional risk to the business model.

Where is the appetite for cable investment right now anyway?

PF told us not so long ago that they couldn't build a business case for a cable to Australia.

You claim there's any amount of spare capacity on SCCN, yet Telecom, who own 50% in that cable, are planning to invest in a new 30Tb cable, so clearly they don't agree with you. Why is that?

As for natural disasters, I can assure you that the very first thing I reached for when earthquakes hit Christchurch was the internet.

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ajobbins

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#766611 20-Feb-2013 18:28

DonGould: You claim there's any amount of spare capacity on SCCN, yet Telecom, who own 50% in that cable, are planning to invest in a new 30Tb cable, so clearly they don't agree with you. Why is that?

To stop competition. Someone will build a cable eventually - there is appetite there. Better to be the ones to do it and maintain your dominant market position.

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DonGould

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#766645 20-Feb-2013 19:21

ajobbins: To stop competition. Someone will build a cable eventually - there is appetite there. Better to be the ones to do it and maintain your dominant market position.

Less than 6 months ago I was here talking about another cable and everyone was telling me that there's no business case.

Now I'm to understand that there is such a business case for a competitor that three of the biggest in the region are going to invest $20 million each to hold the new entrant out of the market.

So we're going to have one cable running at only 5% utilisation and another cable that's built but not running at all.

Well it's great that we're finally moving forward.

We all seem to agree that there is a business case for another cable.

We seem to agree that there is useful content in Australia that people want.

Great progress!

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Ragnor

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#766686 20-Feb-2013 20:32

Pacific fibre couldn't build either a NZ > US or NZ > AU cable because they couldn't secure finance.

Telecom/Telstra/Vodafone have money to invest / can secure finance.

ajobbins

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#766729 20-Feb-2013 21:34

The only ones arguing at the time that there was no business case was Southern Cross and Telecom.

It wasn't that there wasn't a business case that Pac Fibre failed to get off the ground. Securing 400 million in funding before you can deliver anything was always going to be a big ask - especially when (as mentioned before) many SX customers were already locked into long term contracts.

Kordia has considered building a cable, as were Huawei (from memory). It was only a matter of time and this new cable is a pre-emptive move to cement a stronghold on the market.

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michaeln

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Master Geek
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#766876 21-Feb-2013 10:33

DonGould:
michaeln: If you are going to do that, it would be a great idea to also move the Sydney link down to Wollongong or some such, thus avoiding the single point of failure where, as I understand it every cable enters Port Jackson.

What is transit from Wollongong to Sydney worth and is there enough spare capacity in the networks to move 30Tb?

...or are you suggesting that the CDNs we want to talk to will be moved to Wollongong too?

Or somesuch. Melbourne for instance. However, Wollongong is a university town, and although I don't know, I would be surprised if it didn't have ample fibre capacity to Sydney.

There are a number of businesses who care deeply about high availability. For them, the protection path on SX adds another 100ms of latency which causes them problems. They would appreciate an alternate path that is less vulnerable to a single cable-seeking trawler.

NonprayingMantis

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#766884 21-Feb-2013 10:43

ajobbins: The only ones arguing at the time that there was no business case was Southern Cross and Telecom.

.....and every single potential investor that PacFib approached but who didn't pony up the money

NonprayingMantis

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#766885 21-Feb-2013 10:45

Ragnor: Pacific fibre couldn't build either a NZ > US or NZ > AU cable because they couldn't secure finance.

Telecom/Telstra/Vodafone have money to invest / can secure finance.

PacFib didn't try to build an NZ/AU cable. they tried to build an NZ/US cable.

Had they tried to build an NZ/AU cable maybe they would have secured finance for that.

jeffreyh

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Master Geek
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#766910 21-Feb-2013 11:26

Or perhaps its aimed at business market and not residential, I.e. its purely driven by business customers
. If you wanted to build a
High capacity Asia pacific network and didn't want to pay SX, you might decide to build
Your own. More control, you of course might decide to wholesale some or all
Of your share and/or use some of your share for residential.
You may even consider that you would get your money back basing you case
On a business focus.

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