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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#766943 21-Feb-2013 12:11

ajobbins: ... this new cable is a pre-emptive move to cement a stronghold on the market.

Yes the more I look at this AJ I have to agree.

It seems that we need some regulatory assurances in place to ensure that if this cable is built that 1's and 0's are actually delivered to our community at a reasonable cost.

I want an under taking that I'll be able to buy 10Gb landed in Wellington for less than $300 a month by 2015.

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#766952 21-Feb-2013 12:18

DonGould:

I want an under taking that I'll be able to buy 10Gb landed in Wellington for less than $300 a month by 2015.

Yup, you will. Don't worry. John Key rang me and this is sorted out for you.

Cheers,
muppet.

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#767006 21-Feb-2013 13:15

NonprayingMantis:
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.

I think this point everyone kindly chooses to forget.

Along with other facts such as
1) The NZ-US and AU-US price is the same on SCCN.
2) SCCN isn't returning a huge profit to Telecom if the annual report is to go by (Page 34).
3) 90% of usage on SCCN goes to AU, less than 10% goes to NZ. So AU gets a bigger discount due to higher usage.

If PacFibre had just focused on a NZ-AU link, perhaps they could have raised the funds. But they didn't since building a new AU-(via NZ)-US Cable which was really what it was all about (when you think about point #3 as NZ's usage is so small in comparison to AU) was never going to justify itself when there is already 3 cables going into Sydney and reasonable competition in that space.

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#767010 21-Feb-2013 13:21

BarTender:
1) The NZ-US and AU-US price is the same on SCCN.
2) SCCN isn't returning a huge profit to Telecom if the annual report is to go by (Page 34).
3) 90% of usage on SCCN goes to AU, less than 10% goes to NZ. So AU gets a bigger discount due to higher usage.

Does point 3 not contradict point 1?

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Beccara

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#767011 21-Feb-2013 13:24

ajobbins:
BarTender:
1) The NZ-US and AU-US price is the same on SCCN.
2) SCCN isn't returning a huge profit to Telecom if the annual report is to go by (Page 34).
3) 90% of usage on SCCN goes to AU, less than 10% goes to NZ. So AU gets a bigger discount due to higher usage.

Does point 3 not contradict point 1?

Not at all, If AU buys 100gbit and NZ buys 10gbit then simple volume discounts which both countries *CAN* get apply and it holds true. A few people have now said that AU gets cheaper pricing than NZ via backroom deals but it's simply not the case, if per mbit pricing is cheaper in AU via SxC it's simply because they buy more

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johnr

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#767013 21-Feb-2013 13:25

muppet:
DonGould:

I want an under taking that I'll be able to buy 10Gb landed in Wellington for less than $300 a month by 2015.

Yup, you will. Don't worry. John Key rang me and this is sorted out for you.

Cheers,
muppet.

Bahahaha

1080p

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#767136 21-Feb-2013 15:22

BarTender:
NonprayingMantis:
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.

I think this point everyone kindly chooses to forget.

Along with other facts such as
1) The NZ-US and AU-US price is the same on SCCN.
2) SCCN isn't returning a huge profit to Telecom if the annual report is to go by (Page 34).
3) 90% of usage on SCCN goes to AU, less than 10% goes to NZ. So AU gets a bigger discount due to higher usage.

If PacFibre had just focused on a NZ-AU link, perhaps they could have raised the funds. But they didn't since building a new AU-(via NZ)-US Cable which was really what it was all about (when you think about point #3 as NZ's usage is so small in comparison to AU) was never going to justify itself when there is already 3 cables going into Sydney and reasonable competition in that space.

I wonder why Pacific Fibre weren't able to source much investment from Australia? I think that between NZ & AU $400m is not that much, really.

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#767143 21-Feb-2013 15:30

1080p: I wonder why Pacific Fibre weren't able to source much investment from Australia? I think that between NZ & AU $400m is not that much, really.

Or just sourced the $70m for AU-NZ to get things going rather than the whole hog 400m for AU-NZ-US. Since really that was no real competition to SCCN as they have fully redundant links, but that cost $1.3Billion. Now that is a much taller order.

DonGould

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#767149 21-Feb-2013 15:36

1080p: I wonder why Pacific Fibre weren't able to source much investment from Australia? I think that between NZ & AU $400m is not that much, really.

VF only signed a $10 million dollar contract, Telecom won't purchase service at all and neither would TCL, so that leaves a very small market. There is no business case unless you can get revenue from users and with 50% of users tied into Telecom the business case just doesn't stack up.

Investors need to be putting funds in to retail providers and last mile builders.

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NonprayingMantis

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#767187 21-Feb-2013 16:40

DonGould:
1080p: I wonder why Pacific Fibre weren't able to source much investment from Australia? I think that between NZ & AU $400m is not that much, really.

VF only signed a $10 million dollar contract, Telecom won't purchase service at all and neither would TCL, so that leaves a very small market. There is no business case unless you can get revenue from users and with 50% of users tied into Telecom the business case just doesn't stack up.

Investors need to be putting funds in to retail providers and last mile builders.

that's the first time I have heard the wholeof australia referred to as 'a very small market' in comparison with NZ!

DonGould

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#767197 21-Feb-2013 16:52

NonprayingMantis:

that's the first time I have heard the wholeof australia referred to as 'a very small market' in comparison with NZ!

yes, sorry, if you're thinking in terms of NZ based content being served to .au and beyond, then yes.

However, we don't have that sort of data density in New Zealand yet that would fill 1Tb, less 30Tb do we?

From an investment point of view, take $70m and build a cable, then $70m and build a data centre here or just spend $70m and build DC's in Australia... which does seem to be what Bevan and others have done.

I agree that cheaper .au transit then opens up the market for Media Works and TVNZ to push content to the NBN, but did either of them make any commitment to PF?

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NonprayingMantis

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#767201 21-Feb-2013 17:01

DonGould:
NonprayingMantis:

that's the first time I have heard the wholeof australia referred to as 'a very small market' in comparison with NZ!

yes, sorry, if you're thinking in terms of NZ based content being served to .au and beyond, then yes.

However, we don't have that sort of data density in New Zealand yet that would fill 1Tb, less 30Tb do we?

From an investment point of view, take $70m and build a cable, then $70m and build a data centre here or just spend $70m and build DC's in Australia... which does seem to be what Bevan and others have done.

I agree that cheaper .au transit then opens up the market for Media Works and TVNZ to push content to the NBN, but did either of them make any commitment to PF?

I don't really know what you are going on about here. the point you responded to was wondering why there wasn't much investment uptake in Pacific Fibre from Australian ISPs - nothing to do with NZ at all.

DonGould

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#767205 21-Feb-2013 17:11

NonprayingMantis:

I don't really know what you are going on about here. the point you responded to was wondering why there wasn't much investment uptake in Pacific Fibre from Australian ISPs - nothing to do with NZ at all.

Oh, sorry, that's easy, they already have a choice of 4 cables:

SCCN
AJC
Endevor
PPC1

Just how many cables do people expect the Australians to want to invest in?

Also Australian ISPs sort of have their hands full at present gearing up for the NBN, shouldn't think they'd be that interested in even looking at 'yet another dark wet cable provider'.

From what I can tell, they're busy as building data centres.

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muppet

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#767224 21-Feb-2013 17:54

DonGould:
Also Australian ISPs sort of have their hands full at present gearing up for the NBN, shouldn't think they'd be that interested in even looking at 'yet another dark wet cable provider'.

Really? You don't think anyone seriously gearing up to connect to the NBN has enough resource to do that in parallel? Do you think the ISPs are actually going to be digging the trenches themselves?

DonGould:
From what I can tell, they're busy as building data centres.

And as part of that you don't think they might also be thinking about connectivity out from that datacentre?

If ISPs were run by Bob, who also runs a Fish and Chip shop I'd tend to agree with you. Otherwise I think is a very unrealistic view. Any ISP/Network company is always looking at different options and planning for the years ahead. Things like cables, connectivity are all part of it. You don't just say "Oh well we're focused on blah and we're blinkered towards that"

DonGould

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#767236 21-Feb-2013 18:26

muppet:

Really? You don't think anyone seriously gearing up to connect to the NBN has enough resource to do that in parallel? Do you think the ISPs are actually going to be digging the trenches themselves?

Who are we talking about here?

iiNet - Michael is focused on building his company to be the biggest ISP in Australia. He sold his New Zealand interests to Vodafone.
TPG - Also interested in being a big Australian player and going after iiNet.
Internode - purchased/merged with iiNet last year.
Optus - Owned by Singtel. Already own a 40% share in SCCN.
Telstra - Just pulled out of New Zealand, selling its interests to Vodafone.

Ok I just accounted for 80% of the Australian market, so who are you talking about?

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