Southern Cross Cable offers discount bandwidth

The Southern Cross Cable network has increased capacity and dropped its prices by 44 percent to keep up with competitive projects. Southern Cross told customers of availability of the first 200 Gigabits of capacity from its latest upgrade, along with the price reduction. The antipodean cable consortium also announced the …

[Yes Me]

Now I wonder why they'd do that?

So, we have to assume they are doing this to undercut Pacific Fibre's business case, so that PF can't raise the capital they need, so they can't install a cable competing with Southern Cross, so that SC can continue to extract monopoly rents. The fact that they can even envisage a 44% price cut when current contracts expire shows just how much that monopoly is worth.

Business as usual, end users screwed as usual.

[Chezstar]

We have the potential to go to at least 6 Terabits per second by December next year, about 25 times higher than the original design capability in 2000, and our potential is expected to increase dramatically over the next few years,” Pfeffer said.

This is exactly the argument to shove down the throats of the gimps touting wireless broadband as a valid replacement to FTTH.

The common argument is that fibre has no upgrade potential, and that anything above 100meg is pure fantasy on the part of the current government! (Actual dribble touted by the opposition Liberals (The Dribberals?)).

So the fact that in the space of 11 years, Southern cross have upgraded their speeds by 25 times over the original install puts a nice big hole in that argument.

Caveat: Yes, I know that the southern cross cable is a different type of fibre link to what would be installed in FTTH, but at the end of the day, the concepts being used to upgrade the SC cable would be the same used for upgrading FTTH links, in that the endpoint equipment can be upgraded.

[-tim]

Point to point fiber has increased 20,000 times in speed the last 40 years based on speeds of equipment you can buy over the counter in major cities today (those numbers don't include the extra fast stuff they put on the ends of underseas cables). PON has increased 40x times in 20 years in the lab. There are all sorts of problems getting shared fiber to play nice at higher speeds that haven't been solved yet. You can put a million dollar laser on the end of link going to the other side of the world but you can't put one in everyone's home.

[Nordrick Framelhammer]

No surprise

Now that the Southern Cross monopoly is threatened, they suddenly find the ability to increase the capacity and dramatically reduce the price. There is no real surprise in this. New Zeland saw the same thing when the Telecom New Zealand, infamous in New Zeland for some of their business practices and their CEO admitting that Telecom used used "confusion" to keep prices up, monopoly on broadband and PSTN services was removed. Speeds got better, data caps were raised. Now the same thing is happening with Southern Cross. And not surprisingly, Telecom New Zealand is a 50% shareholder in the Southern Cross consortium. Co-incidence? I will leave the reader to think on that one.

[Peter Gray]

And it's not just Telecom - when Telstra announced they were moving in to New Zealand they made a lot of noise about competing with Telecom. A year or so later they were happily settled into a cosy duopoly, with Telstra undercutting Telecom by a few dollars, and Telecom matching prices if customers complained.

I suspect that whoever you are with you won't see any discount in bandwidth costs, let alone a 40% drop.

[Nordrick Framelhammer]

Further to this...

The new rate only applies to new contracts. Us consumers with existing ISP's will continue to be rorted until such time as the existing contracts expire, and as ISP's buy capacity on a 10 yearly cycle, it could be up to a decade before prices drop for some! Yet more proof that real competition is urgently required.