Southern Cross Cables Network (SCC), the company that operates New Zealand’s connection to the internet, may choose to lay another pipe rather than upgrade the current one.
The SCC board has asked management to conduct a study into the construction of a new cable to the US.
Hard on the heels of successful trials with Nortel 40Gbit/s equipment, SCC sales director Ross Pfeffer says a new Southern Cross cable is a possibility and that the company is clarifying its investment plans to build it.
Decisions on the construction of the new cable will be taken over the next year and a half, according to Pfeffer, and will decide whether or not the SCC goes ahead with 40G or 100G upgrades to existing optical fibre links.
However, Pfeffer would not say how much money SCC is would be willing to invest in a potential new cable.
Pfeffer says prices of international transit over the SCC are falling, and have dropped by half in the last 18 months. Asked if the price drops, upgrade and new cable plans are driven by the prospect of increased competition from PIPE Networks and Kordia’s proposed trans-Tasman link, Pfeffer says the SCC isn’t concerned about it.
“We believe our service will always be a competitive offering in the market,” Pfeffer says.
He says New Zealand providers pay the same price for capacity to the United States as Australian customers and claims the market across the Tasman is very competitive.
The Southern Cross Cable cost around US$1.3 billion to build and was completed seven years ago. Originally designed to provide 120Gbit/s, the fully-protected cable system spans some 32,000 kilometres across the Pacific and is currently part-owned by Telecom New Zealand (50 percent), Singtel/Optus (40 percent) and Verizon Business (10 percent).
A commercial success, the SCC has already repaid the debt that financed the cable construction in 2005.
The cable is engineered to last until 2025 and provides 780Gbit/s capacity presently. Next year, the capacity will increase to 1.24Tbit/s.