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Topic # 95945 17-Jan-2012 11:35
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Southern Cross Capacity Up and Price Down - Again

The availability of international capacity on the Southern Cross network continues to expand and prices have fallen again.

Southern Cross today announced the immediate availability of the first 200 Gigabits of capacity from its latest upgrade and a price reduction of up to 44 percent.

Southern Cross also announced the deployment of 100 Gigabits per second transmission equipment by December this year.

“We continue to keep well ahead of the rapidly expanding needs of hi-speed broadband users in both Australia and New Zealand by increasing supply and reducing prices” says Ross Pfeffer, Southern Cross Sales and Marketing Director.

The protected twin cable network with 28,500 kilometres of undersea cable was constructed back in 2000. It’s a major regional asset that now provides the international platform for Australia's NBN and New Zealand's UFB and it has cost a whopping US$1.4 billion. Money well spent, as it provides uninterrupted international capacity for hi-speed internet connectivity to US based content providers.

Capacity Upgrade

Once again we have taken advantage of the very latest developments, to rapidly expand our supply well ahead of demand and to reduce our prices” Pfeffer says.

This is our fifth major capacity upgrade since 2001. After trialling a number of systems, in October 2011 Southern Cross signed a two stage capacity upgrade contract to deploy Ciena’s 6500 Packet-Optical Platform and 5400 Reconfigurable Switches as well as Ciena’s OneControl Unified Management Systems. This first phase uses 40 Gigabits per second transmission equipment on our network for the first time.

This move to 40 Gbps from our existing 10 Gbps platform will be short lived. The rapid pace of technological improvement will allow Southern Cross to implement Ciena's 100 Gbps transmission equipment with a simple line card upgrade by December this year when the second phase of the current upgrade is due to be completed. The upgrade simplicity gives us a rapid time-to-capacity advantage.

Our network's total lit capacity is now 1.4 Terabits per second. By March it will increase to 1.6 Terabits and by December to 2.0 Terabits. We have the potential to go to at least 6 Terabits per second by December next year, about 25 times higher than the original design capability in 2000, and our potential is expected to increase dramatically over the next few years.
“The implementation of 100 Gigabit equipment this year is some two years sooner than previously anticipated and it demonstrates how the potential size of our network grows in huge leaps,” Pfeffer says. “Some have said there won’t be enough capacity for hi-speed internet growth, but as our expansions and the ongoing rapid advances in technology show, that couldn’t be further from the truth”.

Continued Price Reductions

“With lower marginal capacity cost we have reduced our prices to the US from both New Zealand and Australia by 44%”, says Pfeffer, “the third largest decline in our history. Often coinciding with capacity upgrades, price declines are not new for Southern Cross, having averaged over 21 per cent annually since 2001. This longstanding practice has promoted the increasing use of retail internet data with reducing cost”.

Pfeffer said “it’s particularly pleasing to see how ISP competition has resulted in big increases to retail data caps over the last year for both Australian and New Zealand internet users, and to see the retail cost of data continuing to fall. Our new initiatives are again designed to support this process as another step towards the new NBN and UFB environments”.

Cable Reliability

Southern Cross is not just about speed and price. We are equally dedicated to continuous circuit availability. Our new transmission equipment means the performance of the six fibre pairs and 500 repeaters on our diverse cable network is better today than when constructed more than 10 years ago.

"We have implemented the Calient Optical Switching platform at all 10 Network Access Points to augment both the strength and flexibility of the network. That's the foundation on which we design our capacity product for users. In 2008 and at no additional charge we introduced the incredibly successful Drop Restored product range to the ANZ-US market to make sure that our capacity is always deployed to the final internet user with in-built protection. We have cemented the superiority of our protected products on the ANZ-US capacity route".

Cable Future

“The quality of our network also allowed us to confidently extend customers’ capacity contracts from 2020 to 2025,” Pfeffer says. “I expect that opportunity will arise again in 2015 when there is a strong likelihood that the commercial life of the Southern Cross Network will be able to be extended until at least 2030.” “Having said that, just how much longer we will keep upgrading rather than rebuilding depends on future demand growth”.

“Demand growth has averaged around 35 per cent over the last 11 years and in the last year has exceeded 40 per cent. While we are confident that our future upgrades will support much higher demand growth we will continue to monitor developments closely as part of our normal upgrade versus build evaluation process, to ensure that our network is always ahead of the game”.

 

 




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  Reply # 569844 17-Jan-2012 11:50
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Cue "Why isn't my internet cheap/my cap bigger NOW!?"

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  Reply # 569845 17-Jan-2012 11:52
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Or Pacific Fibre is being built and we want to keep our customers...

 
 
 
 


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  Reply # 569860 17-Jan-2012 12:24
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Same day we see this:

http://www.stuff.co.nz/business/6268369/Trans-Tasman-cable-agreement-made





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  Reply # 569863 17-Jan-2012 12:27
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There was a press release from the Chinese consortium this morning about their new Australian cable.

www.stuff.co.nz/business/6268369/Trans-Tasman-cable-agreement-made

Coincidence? I think not...

Jon

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  Reply # 569869 17-Jan-2012 12:44
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knoydart: Or Pacific Fibre is being built and we want to keep our customers...


 

Dead on  Money Mouth




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  Reply # 569873 17-Jan-2012 12:47
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Be interesting to know the proportion of your monthly broadband subscription attributable to international bandwidth...

From that you might calculate approximate cap and or price changes

Damn Zeon, 3 minutes, which I spent looking for the damn stuff link!

Jon

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  Reply # 569877 17-Jan-2012 12:55
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Wonder which ISP will move first to put their datacaps up more

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  Reply # 569879 17-Jan-2012 12:59
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old3eyes:
knoydart: Or Pacific Fibre is being built and we want to keep our customers...

Dead on  Money Mouth


“With lower marginal capacity cost we have reduced our prices to the US from both New Zealand and Australia by 44%”, says Pfeffer, “the third largest decline in our history. Often coinciding with capacity upgrades, price declines are not new for Southern Cross, having averaged over 21 per cent annually since 2001. This longstanding practice has promoted the increasing use of retail internet data with reducing cost”.

If there wasn't a history of capacity expansions and significant price cuts, I'd be tempted to agree that this is a reactionary move.

But there is a history of capacity expansion and price cuts.

Cheers - N

ps. Yes I'm a Telecom employee, but that doesn't invalidate the fairness of my comment here.


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  Reply # 569920 17-Jan-2012 14:24
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To be fair to Southern Cross they have doubled capacity and effectively halved prices (in terms of $ per Mbit) roughly every 2 years since they began.

Nothing new here.

Pacific Fibre won't really influence prices until it's actually built.


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  Reply # 569922 17-Jan-2012 14:25
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I'm not in the ISP game any-more but I wouldn't expect to wake up in the morning to either 44% more internet or a 44% cheaper bill.

First the large transit providers (Vocus/Reach/Sprint/Pacnet/Global Gateway etc) need their contracts to expire, resign at lower rates and pass those rates on to their customers. Then those companies (Your ISP) need their contracts to expire, resign at a lower rate and pass those on to their marketing teams. Marketing will sit on them for 2 months, and senior management 2 months after that.

After all that waiting: The hop over the ditch is really only a small part of the cost compared to peering with other providers in NZ, Aussie and the USA. Plus the cost of their staff and infrastructure.

This is a good step in the right direction in terms of a natural supply/demand though. I always die a little inside when I see how little of their potential capacity is actually in use.




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  Reply # 569926 17-Jan-2012 14:31
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Stuff says that the new price is 6 cents per GB, but that's not correct, is it? SCC charges for bandwidth rather than per GB, right? 6 cents per Gb/s doesn't sound right to me either though...

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  Reply # 569936 17-Jan-2012 14:40
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Altogether though, flow-on effects, albeit probably indirect and untangible, should benefit the consumer.




Most of the trouble in the world is caused by people wanting to be important. (T.S. Eliot)


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  Reply # 570027 17-Jan-2012 16:42
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Maybe we can now get Netflix ?? More capacity  Wink




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  Reply # 570040 17-Jan-2012 16:56
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i wouldnt be surprised if they timed, or accelerated, the release of the news to co-incide with the other news, but its unlikely that they installed new switching equipment and reworked their pricebook in a few short hours.... they also mention that the 100Gbps upgrade will probably happen before the end of the year - so you might see a further price drop then.




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  Reply # 570043 17-Jan-2012 16:58
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old3eyes: Maybe we can now get Netflix ?? More capacity  Wink


yeah, i think capacity was probably only a small part of the reason they are not going to operate here... my bet would be that the cost for the media rights would outweigh the potential return - especially given the 'give me everything for nothing' attitude of a lot of internet users...




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