Southern Cross cable not a bottleneck: Brewer

Industry commentator Jonathan Brewer claims international can be cheaper than national capacity

International capacity on the Southern Cross cable is not a bottleneck, says telecommunications consultant Jonathan Brewer.

Plans by Pacifc Fibre and Kordia to lay their own international cables won’t necessarily lower transit costs, he says on his blog, nztelco.com. Southern Cross Cable is 50 percent owned by Telecom and will be part of Telecom Retail's assets if its shareholders vote for structural separation.

“[International] today can be cheaper than national capacity,” he says. “The Commerce Commission regulated backhaul between cities on a Mbps price as a part of the Unbundled Bitstream Access Standard Terms Determination.

“This regulated product can be more expensive than international.”

He points out that a 100Mbps connection between Dunedin and Auckland costs $17,500 a month but a similar connection between Auckland and international is priced at $12,000 a month.

Brewer also notes in his blog that with much of New Zealand’s internet traffic originating either in Auckland or from offshore, demand for North-South national transit is set to increase dramatically.

“New Zealand’s three national transit providers may be running 10Gb networks today but they’ll need to make the leap to 100Gb backbones quickly to keep pace with peak demand,” he says.

He references Cisco’s Visual Network Index that forecasts internet traffic in New Zealand will grow at a compound annual growth rate of 44 percent between 2010 and 2015.

“They expect the average end user to be downloading almost 14Gb of traffic in 2015 and, as a result, they predict national IP traffic rates of 237Gb per second.”

Based on this, population data from Statistics NZ and fibre maps from Telecom, Brewer has modelled what he expects to be the basic topology and aggregated peak backhaul demand for the South Island in 2015.

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