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.
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.
A Telecom spokesperson says: "The existing west coast/Whenuapai landing is a possibility, as are other sites around or near Auckland."
Then followed up by saying the joint venture appreciates the advantages of diversity.
I think from a financial standpoint, it's cheaper to go from Auckland.
This cable will do very little, if anything, to help bring prices of international bandwidth down.
There is an excellent business case in this for shutting down any potential competition from the likes of a pacific fibre reincarnation.
The fact that Telecom has a large holding in both cables makes this pretty clear. Why build yourself a second cable when your first cable sits at about 5% utilization typically?
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.
Auckland is geographically diverse enough. Both ends of the SX cable land on Auckland's North Shore, but Pac Fibre was looking at potentially landing in South Auckland, for example.
It's a fair bit farther to Wellington from Sydney, and when the majority of bandwidth is likely to be used from Auckland, it doesn't make sense to land it there. You might have to add capacity to fibre between Wellington and Auckland as well.
ajobbins: This cable will do very little, if anything, to help bring prices of international bandwidth down.
There is an excellent business case in this for shutting down any potential competition from the likes of a pacific fibre reincarnation.
The fact that Telecom has a large holding in both cables makes this pretty clear. Why build yourself a second cable when your first cable sits at about 5% utilization typically?
Yip, from a competitive point of view I can't argue with what you're saying AJ.
It does look like a small toe in the water to undermine anyone else by lining up the guns just ready to fire.
At the same time, UFB doesn't seem to have any value to me if customers can't get better performance than ADSL2+ from it.
I've been on 100/10 HFC for the last 6 months and I'm looking at churning to a DSL service simply because with only a 100Gb data cap we don't have enough capacity to make real use of it for TV applications.
Seems to me that the wheels are going to come off the UFB cart if it's not used to deliver more data into the network.
I suggest that with this new cable we are going to see 100/50 UFB plans with 5Tb for data within 36 months for $100 a month or there simply isn't going to be value in the whole space for consumers.
Promote New Zealand - Get yourself a .kiwi.nz domain name!!!
DonGould: ...At the same time, UFB doesn't seem to have any value to me if customers can't get better performance than ADSL2+ from it.
I've been on 100/10 HFC for the last 6 months and I'm looking at churning to a DSL service simply because with only a 100Gb data cap we don't have enough capacity to make real use of it for TV applications.
Seems to me that the wheels are going to come off the UFB cart if it's not used to deliver more data into the network.
I suggest that with this new cable we are going to see 100/50 UFB plans with 5Tb for data within 36 months for $100 a month or there simply isn't going to be value in the whole space for consumers.
Yep agree - a nice fast UFB connection is wasted if there isn't the international capacity to supply it. But in order for supply to increase, the price has to come down. The demand is there (or is getting there), the capacity is there, but the price it's supplied at from the monopoly supplier is well above market equilibrium. Sadly, with Telecom a major player in both cables, they have a vested interest in keeping the supply price high (and IMO, is exactly why they are doing this).
With UFB, I doubt you will see any plans of greater than 100/40 speeds because UFB is not direct fibre it's GPON, so there is a contention ratio on each fibre. Even with a 100/40 connection you are not guaranteed that speed even back to the central office.
graemeh: I don't know why people keep assuming that we are being gouged on price by Southern Cross.
They claim to set their price based on Australian prices and the Aussies have a lot of competition.
If this was untrue and we were being overcharged Sam Morgan's pipe dream would have been funded and they would be building a new connection now.
that's baseline price. it's like going into a hifi shop and paying the ticket price. they'll charge you what they think they can get away with up to the ticket price. but there's a fair chance of movement if they think you might go elsewhere.
graemeh: I don't know why people keep assuming that we are being gouged on price by Southern Cross.
They claim to set their price based on Australian prices and the Aussies have a lot of competition.
If this was untrue and we were being overcharged Sam Morgan's pipe dream would have been funded and they would be building a new connection now.
Part of the reason why Pac Fibre didn't get off the ground was simply the threat of them caused SX to drop their prices to compete. This was however only for some customers (likely the big ones with bargaining power or those up for contract renewals) and the price will (is) trend back up again now the threat of competition has decreased.
My understanding is that many existing SX customers are locked into multi-year contacts for bandwidth, so weren't in a position to sign with Pac Fibre right now.
graemeh: I don't know why people keep assuming that we are being gouged on price by Southern Cross.
They claim to set their price based on Australian prices and the Aussies have a lot of competition.
If this was untrue and we were being overcharged Sam Morgan's pipe dream would have been funded and they would be building a new connection now.
Part of the reason why Pac Fibre didn't get off the ground was simply the threat of them caused SX to drop their prices to compete. This was however only for some customers (likely the big ones with bargaining power or those up for contract renewals) and the price will (is) trend back up again now the threat of competition has decreased.
My understanding is that many existing SX customers are locked into multi-year contacts for bandwidth, so weren't in a position to sign with Pac Fibre right now.
+1 I think AJ and Don are right on the money.
$60 million divided between Vodafone and Telecom is cheap to add a barrier to entry to other players.
The barrier will exist as it will suck the air (contracts and business) out of any other players wanting to get something going.
To actually add something to the conversation I wonder if this is a signal that Kordia was getting to close to a workable business model?
Great strategy anyway, good time to own some Telecom shares.
johnr: 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
The phrase "If you can't beat 'em, join 'em" comes to mind here.
graemeh: I don't know why people keep assuming that we are being gouged on price by Southern Cross.
They claim to set their price based on Australian prices and the Aussies have a lot of competition.
If this was untrue and we were being overcharged Sam Morgan's pipe dream would have been funded and they would be building a new connection now.
Part of the reason why Pac Fibre didn't get off the ground was simply the threat of them caused SX to drop their prices to compete. This was however only for some customers (likely the big ones with bargaining power or those up for contract renewals) and the price will (is) trend back up again now the threat of competition has decreased.
My understanding is that many existing SX customers are locked into multi-year contacts for bandwidth, so weren't in a position to sign with Pac Fibre right now.
I can certainly see the existing customers being in multi-year contracts would make life difficult for a newcomer.
If the rest is true (and I have no reason to doubt you) perhaps an answer is to make the Commerce Commission actually do their jobs and stop companies making monopoly profits.
graemeh: If the rest is true (and I have no reason to doubt you) perhaps an answer is to make the Commerce Commission actually do their jobs and stop companies making monopoly profits.
ComCom have indicated they are 'looking into' this announcement.
"The Commerce Commission says it will consider whether Telecom, Vodafone and Telstra's plan to build a new fibre-optic communications cable between Australia and New Zealand raises "potential competition concerns"."
graemeh: If the rest is true (and I have no reason to doubt you) perhaps an answer is to make the Commerce Commission actually do their jobs and stop companies making monopoly profits.
ComCom have indicated they are 'looking into' this announcement.
"The Commerce Commission says it will consider whether Telecom, Vodafone and Telstra's plan to build a new fibre-optic communications cable between Australia and New Zealand raises "potential competition concerns"."
All the Commerce Commission seem capable of is ensuring that investors in these monopoly operations (and I'm thinking of Infratil and Wellington airport here) earn a good return.
To really get competition I think we need at least four cables and I don't think the NZ market is big enough to support that.
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