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Southern Cross' 44 percent price drop – don't count on discounts just yet

Cable company Southern Cross has announced a price reduction of up to 44 percent. Nonetheless, it's unlikely punters will benefit any time soon.

A 44 percent price reduction in any industry may sound impressive – but unless it flows on to customers, end users couldn't care less.

Cable company Southern Cross says its network capacity has been boosted by 200 gigabits of capacity from its latest upgrade, and announced a price reduction of up to 44 percent.

Nonetheless, it's unlikely punters will benefit any time soon.

ISPs purchase capacity based on long-term contracts, so any flow-on effects will take some time to become apparent.

The Southern Cross cable is New Zealand’s only broadband link to the rest of world and is 50 percent owned by Telecom.

It is the platform for Australia's national broadband network and our UFB network, and this marks its fifth major upgrade since it was built in 2000.

Southern Cross also announced the deployment of 100 gigabits per second transmission equipment by December this year.

“The implementation of 100 gigabit equipment this year is some two years sooner than previously anticipated and it demonstrates how the potential size of our network grows in huge leaps,” said Ross Pfeffer, Southern Cross sales and marketing director..

The network now has a capacity of 1.4 terabits per second, which will increase to 1.6 terabits by March and 2 terabits by December.

The company says it has the potential to reach at least 6 terabits per second by December next year, about 25 times higher than the original capability envisioned.

Meanwhile, Axin, which intends to run a 3000km cable between Australia and New Zealand at a cost of more than $100 million, is making progress with its plans.

Axin said it had signed a survey agreement with Huawei Marine to collect crucial data that would be needed before construction can commence.