Southern Cross Cable cuts prices, announces upgrade

Stuart Corner
Friday, 14 August 2009 13:29

IT Industry - Strategy

Pfeffer dismisses claims that Southern Cross exploits its market power to charge high prices, particularly for New Zealand customers. "For more than 10 years Southern Cross has competed in the Australian market and applied its Australian prices to the New Zealand-US market. This has ensured New Zealanders benefit from increasing Australian competition. Clearly, persistent reports noted in the New Zealand media suggesting Southern Cross exploits its sole provider position in the New Zealand market, are, and have always been, untrue".

Pfeffer said that the effective price declines for most of Southern Cross' Australian and New Zealand capacity to the US been increased as a result of it introducing Drop Restoration .  "Since late 2008 customers using our larger and most popular configurations can safely use all their capacity and lower their cost without experiencing service disruption in the event of a service interruption on one of the two Southern Cross cables."

By March next year Southern Cross intends to boost lit capacity to 620Gbps per cable, taking total lit capacity to 1.24Tbps, and increase in excess of 50 percent.

Pfeffer said: "The capacity expansion will be based on the installation of additional 10Gbps transmission equipment in each of the Southern Cross cable stations. Southern Cross recently concluded a successful trial of 40Gbps transmission equipment on its longest undersea segment between Auckland and Hawaii. While we are very encouraged by the additional capacity growth potential that can be implemented with confidence we are sticking with 10Gbps equipment for now. This is to minimise the total cost of the current expansion while we clarify our investment plans to build a New Southern Cross Network."

Pfeffer said that "the timing, architecture and footprint of the next Southern Cross Network will be established over the next 18 months and future upgrades to the existing network will be optimised in the context of future decisions on new network construction."