Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.




BDFL - Memuneh
64659 posts

Uber Geek

Administrator
Trusted
Geekzone
Lifetime subscriber

# 142881 27-Mar-2014 15:28
Send private message

Seeing there are some discussions about access to data, Telecom sent out this FAQ/comments to the media today:


New Zealand’s international connectivity is high quality, competitively priced and set to expand

The typical unit pricing for international connectivity has dropped 98.5 percent since the Southern Cross Cable (SX) launched in 1997, and prices on the SX cable have reduced by between 20-30 percent year-on-year.

SX establishes New Zealand market prices by benchmarking against the extremely competitive Australian and Hawaiian markets (5 links to the US), and then applying those prices to the New Zealand market (meaning New Zealand is price competitive with the competition heavy AUS-US route).

This competition is evidenced by the decision of numerous international companies who have the choice of provider and location, and who have selected SX as their providers of international connectivity. This was most recently demonstrated by Immarsat’s decision to locate their satellite servicing station in New Zealand, because of their confidence in the backhaul and international connectivity links from this country.

The nature of New Zealand’s international connectivity needs are changing

The rapidly evolving nature of the internet is changing international data flows: in 4 years the US to NZ route will account for approximately half the network traffic (down from 99 percent 10 years ago and 85 percent 5 years ago), with the other half coming from Australia (and Asia). Currently, AU to NZ traffic sits at 37 percent (up from 1 percent 10 years ago).

The cost of international connectivity does not form a large part of the cost of internet to the average consumer

International connectivity makes little difference to the overall price paid by the average consumer. For example, the average cost of international bandwidth for customers on an average $75 entry-level home broadband plan is under $2, or less than 2 percent of the overall price.

Additional NZ-US cables will not substantially reduce the cost to internet users

The argument that another cable will substantially reduce international data costs for average consumers is not supported by the evidence. As can be seen above – even if international connectivity was made free, the most it could these customers is less than $1 per month.

Additionally, an additional trans-Pacific cable is unlikely to substantially alter the provision of data on any given plan, over and above the increases that are already being provided for by the market. Recent history shows that all retail service providers meet and exceed customer demands for data, with caps continuing to grow, and options available for so-called ‘unlimited’ plans.

A trans-Pacific cable will primarily be driven by Australian market economics

It is important to note that New Zealand traffic makes up approximately 15 percent of data on the current US link, the rest being to Australia. The economics of any international cable to the US are such that NZ acts only as an adjunct to the connection to Australia, because most of the trans-Pacific demand comes from that country.

A New Zealand Government subsidy for a NZ-US link will be a subsidy for Australian consumers

As a result, any direct New Zealand based government subsidy for a US cable will primarily be of use and benefit consumers in Australia, rather than New Zealand. As stated, this is because approximately 85 percent of the traffic on the Pacific route is for Australia (accruing benefits to Australia over New Zealand at a ratio of 6 to 1).

Future connectivity needs are being met

SX utilises 15 percent of its current capacity and with capability enhancements can meet the growth in New Zealand’s demand for data for at least a decade.
The Southern Cross Network has been engineered until 2025. In 2001 total installed capacity was 80 Gb/s, and in January 2003 the total network was expanded to 480Gb/s. Upgrades in 2009 and 2010 increased capacity to 1.2Tb/s. The 40G Coherent technology upgrade in 2012 increased total lit capacity to 1.6Tb/s with the current 100G Coherent upgrade to increasing lit capacity to 2.6Tb/s in 2013. This latest upgrade will increase lit capacity to 3.6Tb/s by Q2 2014.

Additional private sector cable investments have been signalled, which include:

 

  • Telecom, Vodafone and Telstra have signed a memorandum of understanding (MoU) to co-invest in the construction of the Tasman Global Access (TGA) submarine cable between New Zealand and Sydney. The TGA cable would meet growing demand for capacity with Australia (and indirectly with high growth economies in Asia), and would provide additional international resilience for New Zealand by providing another route to the US, via Australia. The cable would give extra redundancy and reflects the growing importance of trans-Tasman internet traffic: for example, around 40 percent of both Telecom and Vodafone's current international internet traffic is now Australia to New Zealand, versus just 10 percent in 2000
  • Hawaiki Cable is planning to build a 14-000km cable system between New Zealand, Australia, Hawaii and the US west coast
SX’s system to the US has more capacity than New Zealand requires for the foreseeable future, and any investment in the TGA cable will more than double that. Any additional cables will not deliver needed capacity, as we are already oversupplied, and will not reduce prices further.

Current international connections

Southern Cross (SX)
Southern Cross Cables Limited was founded in 1997 by agreement between Telecom New Zealand, Optus and MFS Globenet (subsequently acquired by WorldCom, and then Verizon). Southern Cross owns and operates a trans-Pacific submarine cable network connecting Australia, New Zealand, Fiji and Hawaii to the internet backbone on the United States West Coast, providing carrier neutral services to carriers, internet and content service providers and corporations.
Southern Cross is an independent entity and is owned by Telecom New Zealand (50 percent), SingTel Optus (40 percent) and Verizon Business (10 percent).

Tasman 2
Tasman 2 is an old cable of which Telecom owns 50 percent. It is low capacity (it can carry only 1 percent of the company’s trans-Tasman capacity), however it is used to provide redundancy for some services which are latency sensitive, including corporate traffic and voice.






View this topic in a long page with up to 500 replies per page Create new topic
 1 | 2 | 3
383 posts

Ultimate Geek


  # 1013969 27-Mar-2014 16:32
Send private message

I liked the so-called in front of unlimited plans.

Remind me again how much of the southern cross cable Telecom owns again?

1948 posts

Uber Geek
Inactive user


  # 1013997 27-Mar-2014 17:00
Send private message

Jaxar: I liked the so-called in front of unlimited plans.

Remind me again how much of the southern cross cable Telecom owns again?


My personal view was we as a country should be very happy that Telecom in the day had the foresight and capital to build SCCN. Since I personally doubt the Telecom of today would have the funding to do the full build with the costs that they are. It was only because Telecom was a 50% owner and mandated that one leg of the Aus <-> US link came via NZ that it's here at all.

So lets sit and ponder how different NZ would as a country without SCCN before we slate Telecom for enforcing the same cost to deliver Aus<->US and NZ<->US and there is plenty of competition over in Australia?

 
 
 
 


8034 posts

Uber Geek

Trusted

  # 1013998 27-Mar-2014 17:00
2 people support this post
Send private message

Pipe and SXC have a pretty cosy duopoly on transit to the US given the latency on the routes via Asia.

Yes SXC have regularly reduced the price/Mbit due to new technology increasing their raw capacity but they still make supernormal profits and have recouped the investment cost many times over for their shareholders.

More competition is needed.



8034 posts

Uber Geek

Trusted

  # 1014016 27-Mar-2014 17:14
One person supports this post
Send private message

plambrechtsen:

My personal view was we as a country should be very happy that Telecom in the day had the foresight and capital to build SCCN. Since I personally doubt the Telecom of today would have the funding to do the full build with the costs that they are. It was only because Telecom was a 50% owner and mandated that one leg of the Aus <-> US link came via NZ that it's here at all.

So lets sit and ponder how different NZ would as a country without SCCN before we slate Telecom for enforcing the same cost to deliver Aus<->US and NZ<->US and there is plenty of competition over in Australia?


It's a too profitable niche for someone else to have not built something if Telecom didn't. The problem is really in building the 2nd, 3rd or 4th cable.



1948 posts

Uber Geek
Inactive user


  # 1014033 27-Mar-2014 17:38
Send private message

Ragnor: It's a too profitable niche for someone else to have not built something if Telecom didn't. The problem is really in building the 2nd, 3rd or 4th cable.


To Australia that is true... NZ not so much.

If it hadn't been built I think an upgrade or new trans-tasman would have happened much like what Telecom/Vodafone and Telstra are doing. But definitely not a direct NZ<->US link.

636 posts

Ultimate Geek


  # 1014046 27-Mar-2014 17:59
3 people support this post
Send private message

Perhaps I'm stating the obvious here:

All things considered, and fair enough the largest cost to getting broadband to home is Chorus... What are we doing with a crappy 40GB quota for $75 when the International connectivity is only worth $2!

What I would like to know.... is what is the cost per GB from one DSL client to another DSL client within New Zealand. In other words, what is the national transit average for a residential customer on a contended line?

Years ago national traffic was cheap enough that it was unmetered.... so exactly what percentage of the cost was International then, and what percentage of the cost is national now? Those two mathmatical answered questions are the only real answers to make sense from, both not provided in that info statement from Telecom.

I never ever expect an honest answer to that question because I don't believe there ever will be in cold hard maths not spin or words.

I'd like to know when it became more expensive to provide Internet service and let's just stick with DSL for a while - of how cheaper the infrastructure 'should' be getting as technology ages and the years add on since then?

I'm talking DSL here. I realise with fibre there's a lot of work involved rolling this out and the costs will be very large. However, I still can't get it and I'm 2KM from my CBD yet the poor side of town has fibre available most places so let's not prematurely include fibre costs because I can't buy it so I don't want to be pre-funding it right now, I'd be happy with VDSL but that's not ready yet either, only 2 doors down grrr.

So back to $75 for ADSL with a 40GB cap since Telecom want to point out their cheapest plan for good PR, in terms of how often and how much they have increased their smallest plan quota's, does the percentage it rise directly correlate with the percentage it costs less to provide national transit? Since $2 for International isn't worth even bringing in to whatever spin reply for this question.


636 posts

Ultimate Geek


  # 1014068 27-Mar-2014 18:22
2 people support this post
Send private message

These capacity increases also seem to be announced each time someone threatens to create anther cable.

First Pacific Fibre, now Dotcom.

So I'd say there's a lot of artificial scarcity going on with SX still for as long as possible. After all, that's business - maximising profits. Only competition will break up some complacency.

I'm a Telecom customer again at the moment, but as an observer of Telecom deals and changes over the years, and all this being my personal opinion - they only ever really come after someone threatens or is already doing what they're not first.

 
 
 
 


5402 posts

Uber Geek

Trusted
Lifetime subscriber

  # 1014082 27-Mar-2014 18:52
One person supports this post
Send private message

Additional NZ-US cables will not substantially reduce the cost to internet users

More BS from the part-owner of the SX cable.




Sideface


8034 posts

Uber Geek

Trusted

  # 1014094 27-Mar-2014 19:09
One person supports this post
Send private message

plambrechtsen:  But definitely not a direct NZ<->US link.


SXC has like a 10% ROI returning a dividend of $80-90 million USD per year.

I'm still amazed Pacific Fibre couldn't pull off raising the funds needed to build it.

6434 posts

Uber Geek


  # 1014098 27-Mar-2014 19:17
Send private message

Sideface:
Additional NZ-US cables will not substantially reduce the cost to internet users

More BS from the part-owner of the SX cable.


how is it BS?   Most of the cost of broadband is Chorus cost, which has nothing to do with international.

International makes up less than $10 of the total cost of broadband for ISPs,  probably more like $2-3 on average.  So even is southern cross was free, you would save absolute max $10, and in most cases much less, on your $80-100 broadband bill.

6434 posts

Uber Geek


  # 1014114 27-Mar-2014 19:31
Send private message

kiwirock: Perhaps I'm stating the obvious here:

All things considered, and fair enough the largest cost to getting broadband to home is Chorus... What are we doing with a crappy 40GB quota for $75 when the International connectivity is only worth $2!



price discrimination

you can get unlimited naked ADSL for $79, $85, $90,  from Bigpipe, Flip, and Slingshot respectively.  It's there if you want it.



What I would like to know.... is what is the cost per GB from one DSL client to another DSL client within New Zealand. In other words, what is the national transit average for a residential customer on a contended line?


bugger all, although it isn't costed in per GB terms, its based on bandwidth - paid as peak time Gbps



Years ago national traffic was cheap enough that it was unmetered.... so exactly what percentage of the cost was International then, and what percentage of the cost is national now? Those two mathmatical answered questions are the only real answers to make sense from, both not provided in that info statement from Telecom.


with all the caching and other stuff going on % of national traffic is much bigger now than it used to be, prob around 30-40% for most ISPs.
It used to be around 10%



I never ever expect an honest answer to that question because I don't believe there ever will be in cold hard maths not spin or words.

I'd like to know when it became more expensive to provide Internet service and let's just stick with DSL for a while - of how cheaper the infrastructure 'should' be getting as technology ages and the years add on since then?


not sure what you are asking here.

It's way cheaper now than it used to be.  
2008 a 40GB cap plan with a landline cost you something like $200 from Telecom (http://www.nbr.co.nz/article/telecom-adds-gobs-gigs-broadband-plans-launches-website-35869 -bear in mind the price of $150 exclude the landline which is an extra $50)
Now it costs you $75 including the landline.  That is much less than half the price.



I'm talking DSL here. I realise with fibre there's a lot of work involved rolling this out and the costs will be very large. However, I still can't get it and I'm 2KM from my CBD yet the poor side of town has fibre available most places so let's not prematurely include fibre costs because I can't buy it so I don't want to be pre-funding it right now, I'd be happy with VDSL but that's not ready yet either, only 2 doors down grrr.

So back to $75 for ADSL with a 40GB cap since Telecom want to point out their cheapest plan for good PR, in terms of how often and how much they have increased their smallest plan quota's, does the percentage it rise directly correlate with the percentage it costs less to provide national transit? Since $2 for International isn't worth even bringing in to whatever spin reply for this question.



back in 2006 that entry level plan was 200MB.  

3 years ago that $75 plan was 2GB.  

now it is 40GB.

I'l let you do the math on whether that has followed the trend of int bandwidth prices since I can't be bothered to calculate it.

636 posts

Ultimate Geek


  # 1014120 27-Mar-2014 19:44
One person supports this post
Send private message

Yes however Telecom's focus is that we don't need more Int capacity based on how cheaper SX keeps getting. Back then Int capacity was greater priced - now it's not so as you've pointed out at the end.

So the real cost is Chorus and infrastructure, or shareholder payouts, CEO salary and re-branding? That's if national bandwidth is much cheaper.

So why has the cost of providing ADSL gone up? If that's the main reason for the price?

That's why this whole media statement makes no sense. It's just a knee jerk reaction to Dotcom's Int fibre ideas. Now this is NOT going to change by going from Telecom to Spark - the anti-competitive attitude.

So what Dotcom really needs to propose, is a new network NZ wide that doesn't involve Chrous.

Then we're talking.




856 posts

Ultimate Geek


  # 1014121 27-Mar-2014 19:45
Send private message

kiwirock: Years ago national traffic was cheap enough that it was unmetered.... so exactly what percentage of the cost was International then, and what percentage of the cost is national now? Those two mathmatical answered questions are the only real answers to make sense from, both not provided in that info statement from Telecom.

I never ever expect an honest answer to that question because I don't believe there ever will be in cold hard maths not spin or words.


If I recall correctly, one of the problems with unmetered national traffic was the majority of consumers had unreasonable expectations that it meant everything served from a .nz domain was national and instead used 50% of their international data cap downloading a file that they thought was served from NZ because the link to it came from a site using a .co.nz domain.

It's easier to tell customers it's all counted as one.

kiwirock: These capacity increases also seem to be announced each time someone threatens to create anther cable.

First Pacific Fibre, now Dotcom.

So I'd say there's a lot of artificial scarcity going on with SX still for as long as possible. After all, that's business - maximising profits. Only competition will break up some complacency.

I'm a Telecom customer again at the moment, but as an observer of Telecom deals and changes over the years, and all this being my personal opinion - they only ever really come after someone threatens or is already doing what they're not first.


Okay they are talking about upgrades in one small part of their statement, a network like that is always going to have upgrades and involve, the key point they are making is NZ<->US has far less use proportionally than AU<->NZ<->US and that for the NZ government to contribute large chunks of money to it's construction would subsidize traffic that goes through NZ or bypasses it (via alternative legs, which the NZ stop for redundancy).

Southern Cross seem to be the only ones so far in this thread that have remembered that Hawaiki are doing just that, it's an Australia to US cable, with a major spur to Whangarei and minor spurs to several PI nations, note that they aren't criticizing this as unviable, they are actually doing the complete opposite signaling that there is already significant work on an alternative.

1948 posts

Uber Geek
Inactive user


  # 1014133 27-Mar-2014 20:07
Send private message

Ragnor:
plambrechtsen:  But definitely not a direct NZ<->US link.


SXC has like a 10% ROI returning a dividend of $80-90 million USD per year.

I'm still amazed Pacific Fibre couldn't pull off raising the funds needed to build it.


I think you are confusing income with profit. The actual figure is far smaller than that from what I have seen once all the infrastructure and staff are paid (which is a Telecom line item) which comes out of what SCCN pays Telecom. Plus you need to take into account the cable isn't going to last forever so money needs to be banked for buying a new one and the are ongoing upgrades aren't being done for free.

Really... I always personally thought Rod Drury especially was being disingenuous as he wasn't being honest about the build. He was publically saying "NZ is getting ripped off and we need more capacity into the country to bring down prices" whereas when you talk to him face to face as I have done a number of times it was only about providing more capacity into Australia. The fact it would take a detour via NZ was just the icing on the cake and not necessarily the cake itself.

If he had been honest and said "we are looking to bring more capacity into Australia, and help NZ along the way" I would have been happy with that as that was the truth. But that didn't make as interesting a news bite.

6434 posts

Uber Geek


  # 1014157 27-Mar-2014 20:30
Send private message

kiwirock: Yes however Telecom's focus is that we don't need more Int capacity based on how cheaper SX keeps getting. Back then Int capacity was greater priced - now it's not so as you've pointed out at the end.


no they are saying that southern cross still has absolutely masses of capacity left in it, which is true.

No point buying a new fridge if your existing fridge is only ever half full.




So the real cost is Chorus and infrastructure, or shareholder payouts, CEO salary and re-branding? That's if national bandwidth is much cheaper.

So why has the cost of providing ADSL gone up? If that's the main reason for the price?




the cost of national and international has gone down.... but people are using more,  so the $2-3 contribution to current cost today is about the same as it was 10 years ago.   you just got a lot less with that $3 than you do today.




That's why this whole media statement makes no sense. It's just a knee jerk reaction to Dotcom's Int fibre ideas. Now this is NOT going to change by going from Telecom to Spark - the anti-competitive attitude.

So what Dotcom really needs to propose, is a new network NZ wide that doesn't involve Chrous.

Then we're talking.





lol.  that's all I can say for that.

 1 | 2 | 3
View this topic in a long page with up to 500 replies per page Create new topic



Switch your broadband provider now - compare prices


Twitter and LinkedIn »



Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

Logitech introduces new Made for Google keyboard and mouse devices
Posted 16-Oct-2019 13:36


MATTR launches to accelerate decentralised identity
Posted 16-Oct-2019 10:28


Vodafone X-Squad powers up for customers
Posted 16-Oct-2019 08:15


D Link ANZ launches EXO Smart Mesh Wi Fi Routers with McAfee protection
Posted 15-Oct-2019 11:31


Major Japanese retailer partners with smart New Zealand technology IMAGR
Posted 14-Oct-2019 10:29


Ola pioneers one-time passcode feature to fight rideshare fraud
Posted 14-Oct-2019 10:24


Spark Sport new home of NZC matches from 2020
Posted 10-Oct-2019 09:59


Meet Nola, Noel Leeming's new digital employee
Posted 4-Oct-2019 08:07


Registrations for Sprout Accelerator open for 2020 season
Posted 4-Oct-2019 08:02


Teletrac Navman welcomes AI tech leader Jens Meggers as new President
Posted 4-Oct-2019 07:41


Vodafone makes voice of 4G (VoLTE) official
Posted 4-Oct-2019 07:36


2degrees Reaches Milestone of 100,000 Broadband Customers
Posted 1-Oct-2019 09:17


Nokia 1 Plus available in New Zealand from 2nd October
Posted 30-Sep-2019 17:46


Ola integrates Apple Pay as payment method in New Zealand
Posted 25-Sep-2019 09:51


Facebook Portal to land in New Zealand
Posted 19-Sep-2019 18:35



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.