Southern Cross Announces Price Reduction

Southern Cross today announced in January 2012 the availability of the first 200G of capacity on the  Southern Cross Cable Network, a 28,500 km submarine cable system linking Australia, New Zealand and the US. And Southern Cross will offer a price reduction of up to 44 percent. In the meantime, Southern Cross also announced the deployment of 100G transmission equipment by December this year. 

 

This is a result of the fifth major capacity upgrade of the Southern Cross Cable Network since its ready for service in late 2000. Southern Cross signed in October 2011 a two stage capacity upgrade contract to deploy Ciena’s 6500 Packet-Optical Platform and 5400 Reconfigurable Switches as well as Ciena’s OneControl Unified Management Systems. The first phase uses 40 Gbps transmission equipment on the Southern Cross Cable Network for the first time. The second phase will implement Ciena's 100 Gbps transmission equipment with a simple line card upgrade by December 2012.

The total lit capacity Southern Cross Cable Network is now 1.4 Tbps. It will be increased to 1.6 Tbps by March 2012 and 2.0 Tbps by December. And there is potential to go to at least 6 Tbps by December 2013. 

With lower marginal capacity cost, Southern Cross have reduced the prices to the US from both New Zealand and Australia by 44%.

Even though, the prices for capacity from the US to both Australia and New Zealand are still much higher than those from the US to Asia countries. With the emerging of additional available capacity over the southern Pacific routes and new competitors like Pacific Fibre, the capacity prices may go down further.

The cable operators in Tasman and Southern Pacific regions are much profitable than other regions. Of course, Southern Cross's significant price reduction and capacity upgrade as well as the proofed reliability with ring network structure may cause the competitors like Pacific Fibre  and the so-called Chinese invested Trans-Tasman Cable to adjust their marketing policies.  

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