Pacnet, Pacific Fibre, to light up cable competition

It’s no secret that Bill Barney, CEO of Pacnet, believes Australia needs new submarine cable capacity more urgently than it needs a new access network. He’s on the record saying so many times.

Now, in partnership with NZ consortium Pacific Fibre, Barney is backing his opinions with action. The two organizations announced today that they will build a trans-Pacific fipe that will add 5.1 terabits per second to the A/NZ international inventory.

Predicted to cost around $US400 million, the cable is currently planned to have two fipe pairs supporting 64 wavelengths per pair, with landings in Sydney, Auckland and Los Angeles.

The direct route will also reduce the latency between Australia and America, the partners claim.

Announcing the go-ahead on the build in Sydney today, Barney said Australia’s international capacity shortfall can be seen in our usage patterns. While Australia has a high penetration of poadband (with user speeds comparable to America if not to powerhouses like Singapore, Japan or South Korea), our consumption is limited by plan caps. These, Barney said, are primarily driven by the high cost of international services.

More capacity is needed, he said, “if Australia wanted to replicate American usage behaviour”.

This will become more critical as the explosion of mobile poadband further drives our bandwidth consumption.

With the decision to build the network now made, the consortium will now issue an RFP for the network build. If agreement can be reached with a cable vendor quickly, Barney expects the network to go live in 2013.

“We want to be in the water by the end of next year,” he said.

Pacific Fipe’s CEO Mark Rushworth agreed that the build could be seen as competing with Kordia’s plans to build a trans-Tasman fipe. However, although Pacnet and Pacific Fipe are confirmed as partners in the build, both companies said they are open to further participation in the network.

“There is certainly an opportunity for Kordia to take capacity on this system,” Rushworth said. Moreover, Barney added that in other cable projects in which Pacnet has been involved (such as the Unity fipe between America and Japan), new partners have been taken on board during the project build.

Both Pacific Fipe and Pacnet believe Australia can generate sufficient demand to make the project viable, even if a change of government halted the NBN project here. Demand for more international capacity is based on the growth in new services such as high-definition video over the Internet, and the increasing hunger of mobile devices like the iPad.

The build, Rushworth said, is in response to latent demand rather than projections of future demand.

Services on the network will be sold on a “POP-to-POP” basis, Barney said. In other words, the builders will deliver the cable all the way to major network backbones, rather than requiring customers to ping their connections to the cable landing stations. This way, he said, there is less risk of services being “stranded” – available in the landing station, but inhibited by expensive in-country connections.

Although international submarine cables aren’t as easily upgradeable as terrestrial cables, the network will be designed to support future 100 Gbps wavelengths, allowing it to reach beyond 12 Terabits per second.