He added: "It is very pleasing to see 100Gbps equipment operating some two years earlier than previously expected. While it is unlikely that we will be able use the 100Gbps equipment for next year's upgrade, it is going to be an option much sooner than we previously thought and the potential size of our network will keep growing in huge leaps." He said there was "a strong likelihood" that 100Gbps technology would be deployed by 2015.
He said the upgrade to 40Gbps equipment would take the potential capacity of the network to at least 6Tbps, some 25 times higher than the original design capability of 240Gbps in 2000.
According to Southern Cross, demand for capacity on its network is growing at an annual rate of 35 percent from both Australia and New Zealand. "Growth over the last two to three years is strongly driven by rapidly increasing downloads per fixed line subscriber which have been made possible by a dramatic increases in average access speed, a massive lifting in monthly retail data caps and continuing reductions in international capacity prices," the company said.
It added: "International capacity prices are expected to continue their decline. This will be driven by the very competitive Australian market where four international capacity suppliers operate out of Sydney, by capacity upgrades that lower the marginal cost of supply, and by our ISP customers who actively seek to drive down the cost of supplying ever increasing volumes of data at falling retail prices to their subscribers."
Pfeffer said: "We will continue with our commitment to competition based pricing in all of our markets. While we are the only operator out of New Zealand, we set our NZ to US prices at levels no higher than our Australia to US prices. We will also continue to keep our trans-Tasman prices at the same level as our Hawaii-US prices, another market in which competition is well entrenched."
According to Wiggs: "The upgrade amount is limited by the older in-the-water technology of the Southern Cross system, and is lower than we had expected. Our base case is for a system with 64 wavelengths of 40Gbps, or 2.56Tbps per fibre pair, and 5.12Tbps for two fibre pairs."
He claimed: "We believe that the phrase 'total network potential' means 6Tbps of capacity on each side of their dual route system, which implies each fibre pair will have an average top capacity of 2Tbps. That means each fibre pair would have 50 wavelengths of 40Gbps each. (Southern Cross may be quoting unprotected numbers for the network, in which case the system would be averaging 1Tbps per pair, or 25 wavelengths.)
"A shift to 100Gbps technology would show a lower number of wavelengths compensating somewhat for the increased capacity per wavelength. This lower upgrade potential hints that the Southern Cross system may be full earlier than forecast, which some experts are saying will be well before the end of the decade."
Wiggs added that traffic growth forecasts from industry consultants Telegeography and others were well in excess of the 35 percent per annum quoted by Southern Cross.
However the company decided to stick with the current 10Gbps technology for the subsequent upgrade, with Pfeffer saying the decision had been taken so as to "minimise the total cost of the current expansion while we clarify our investment plans to build a new Southern Cross Network."
He said: "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." Pfeffer told iTWire today that, as a result of improvements in transmission technology there would be no need to build a new network for many years.
In December 2009 Nortel announced the first commercial 100Gbps link, for Verizon, over 900kms between Frankfurt and Paris. 100Gbps is now an established technology for terrestrial links but still cutting edge underwater. Sea-Me-We announced in February plans to upgrade the underwater portion of its network to 40Gbps and the short land portion, in Egypt to 100Gbps. It will use Alcatel Lucent technology for the 40G upgrade and Ciena for the 100G.
Leighton Contractors' planned Australian Singapore Cable, announced last month and scheduled for completion in 2013 will use 100G technology from the outset.