Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Trans-Pacific telecom cable prices cut again

Trans-Pacific telecom cable prices cut again

By Pattrick Smellie

Jan 14 (BusinessDesk) - The price of internet connection to the rest of the world is dropping again as New Zealand's only international cable owner, Southern Cross Cables, announces a 20 percent cut in its capacity prices.

However, critics of the single carrier say it should be cutting its fees much harder to encourage the uptake of fast internet services which government policies have identified as a crucial element in getting New Zealand growing faster.

Jointly owned by Telecom New Zealand, Singtel-Optus of Singapore and Australia, and the American telecommunications provider Verizon, Southern Cross has long been the butt of accusations that its pricing is uncompetitive.

But a would-be competitor involving prominent New Zealand businesspeople, Pacific Fibre, withdrew its plans after failing to raise funding for an alternative cable to service the New Zealand and Australian mainlands via the US and Pacific.

Despite annual average rate cuts by Southern Cross of just over 20 percent over the last decade, former Pacific Fibre spokesman Lance Wiggs said capacity demand was increasing by as much as 50 percent annually.

"I get angry because 20 percent (rate cuts) isn't sufficient to drive the growth we need in New Zealand," said Wiggs. Revenues would continue to rise at Southern Cross even with the rate cut because demand growth was likely to more than offset the reduction.

However, Southern Cross's director of sales and marketing, Ross Pfeffer, said the new pricing was consistent with regular price reductions and relected "the capacity side and market conditions, particularly in Australia, Hawaii, and the US", where Southern Cross faces competitor cables.

A further 15 percent reduction from the latest list price was also available for parties who signed up in the first half of this year, and it was also common for longer term contracts for very large bulk buyers of capacity to be struck at prices reflecting the expectation that prices will keep falling in the future.

Dion Hallam of Wellington internet service provider Xtreme Networks said there had been particularly active discount offers last year when Pacific Fibre was still in prospect, but that the company was paying "maybe 20 percent of what we were paying eight years ago."

Part of Southern Cross's ability to continue price-cutting reflects improvements in cable technology, which have allowed increased capacity to be installed without adding additional physical cable.

The cable, which runs in a figure-eight loop between New Zealand, Hawaii, Fiji and the US mainland, is nearing completion of its eight capacity upgrade, taking total lit capacity to 2 Terbits a second, with potential to go to "at least 7Tbps, about 30 times higher than our original design capability," said Pfeffer.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news