Australia-Japan Cable upgraded

By Stuart Corner
Monday, 14 January 2008 01:03

Business IT - Networking

In a move timed to steal the thunder from Pipe Networks' expected announcement later today of the go-ahead for its Project Runway submarine cable   the Telstra-lead Australia-Japan Cable issued a press release last week - embargoed to today 14 January - announcing that an extra 40Gbps of capacity had been added to its system linking Australia, Guam and Japan. It is the first of two upgrades which will add a total of 160Gbps of new capacity, and has been available since December 21, 2007. The second 120Gbps upgrade is due to be completed in April 2008. The Phase 1 implementation provides capacity in 10Gbps wavelengths while Phase 2 will provide capacity in 10Gbps wavelengths and also SDH and ethernet capabilities.

Despite the embargo, the announcement was hardly news. AJC announced plans for the upgrade in May 2007, saying "Australia Japan Cable...is being upgraded to provide 240Gbps of capacity in response to rapidly increasing demand. Work is scheduled to be completed by early 2008, with some of the new capacity available in late 2007." It said at the time that the upgrade would cost between $US20m and $US30m.

In today's announcement, AJC CEO Robin Russell claimed that the upgrade would increase the international capacity available from Australia by 50 percent adding that "Our upgrade goes a long way to filling the identified need for the foreseeable future, even taking into account the large growth in demand."

However Pipe Networks has claimed all along that the primary reason for its planned link from Australia to Guam, where existing systems will provide onward connectivity to the US and elsewhere, was not a shortage of capacity but a shortage of competition leading to high prices. Other leading industry figures have confirmed this.

Last November Byron Clutterbuck, VSNL's vice president, global carrier solutions, told telecoms industry newsletter, Exchange, that: "The capacity into Australia is rather constrained so my wholesale group does not offer any services into Australia, it is too costly...You really have a two player market for international facilities and generally when you have a two player market, prices stay high. You have a few cable systems: SeaMeWe3, AJC and Southern Cross, but really they are controlled by two parties."