Southern Cross Cables Network (SCC) is considering whether to invest in another pipe to increase capacity from New Zealand to the US.
The consortium, which is owned by Singtel Optus (40%) , Telecom New Zealand (50%) and Verizon Business (10%), confirmed to Computerworld NZ that the board had instructed management to conduct a study into the construction of a new cable to the US.
SCC director of sales and marketing, Ross Pfeffer, told TelecomsEurope that the board had requested a study into options for the cable network’s development. “We have discussed it with the board a few times and it is now a formal project. This is a clean deck and we will be looking at all the options.”
Pfeffer said that the study would include new technologies, whether to build an additional link or upgrade and whether to extend points of presence. “There is a distinct possibility that we would expand our footprint,” he said without being drawn on the destinations involved.
Completed seven years ago, the existing €788 million cable runs between New Zealand and eastern Australia, and from New Zealand to the US via Fiji and Hawaii.
Given that the current cable was half way through its shelf life, decisions had to be made about its future and upgrade possibilities and options, he said. The development of the NBN in Australia and similar developments in New Zealand will have a key impact on the strategy moving forward, Pfeffer added.
Detail on potential plans will emerge after the SCC board meeting in mid-September. The full recommendations are due to presented to the board by the middle of next year.
The news follows a spate of activity in the Australasian cable market, with rival Pipe networks successfully lighting the first tranche of its cable from Sydney to Guam. The PPC-1 cable, which will cover PoPs in Sydney, Guam, Papua New Guinea, Tokyo and
San Jose, will officially launch on the October 8.
Competition for cable capacity has heightened, with Pfeffer claiming recently that price reduction for capacity to the US were available immediately and by March next year lit capacity would expand again by more than 50%.
Pfeffer said the last capacity upgrade had been completed in January.
“Southern Cross is accelerating its capacity expansion and reducing prices in anticipation of continuing strong demand and in support of Government initiatives for high speed broadband in both Australia and New Zealand,” he said.
Last month Southern Cross reported that it had completed successful trials with Nortel using 40-Gbps optical technology across an ultralong-distance submarine cable. The technology can quadruple existing capacity without reengineering the network.