SCCN : Prices & Capacity

Just know that Southern Cross (SCCN) has offered volume-based connection pricing :-D

the new Southern Cross price for 5 Gbps of restored capacity represents around US$0.28 per GigaByte downloaded from the US. This has reduced by 86%, from US$ 1.95 per GigaByte, in December 2003

How can we explain this "mathematically"? At these price figures it only makes sense if the 5 Gbps pipe is shared by several users, right? Then, how many users? How about the CIR?

Source Subtelforum

Quotes:

• “another price reduction is available immediately and by March next year lit capacity will expand again, this time by more than 50%”
• “The latest initiatives follow closely on the heels of the last price reduction and capacity upgrade that was completed in January of this year. 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”
• Prices for circuits to the US, from both Australia and New Zealand, have just been reduced by 15% bringing reductions over the last 18 months to more than 50%. “These reductions are made possible by our ongoing implementation of cost effective capacity expansions and that’s great for high speed broadband”
• Southern Cross has also reduced both its Trans-Tasman and Hawaii-US prices. “Our prices for these smaller markets have just been reduced by 49% and it is our intention to keep prices for these markets aligned to ensure our Trans-Tasman pricing reflects very strong competition in the US-Hawaii Market”
• “By March next year lit capacity will grow to 620 Gbps per cable, taking total lit capacity to 1.24 Tbps growing by more than 50%. “There can be no doubt that both Australia and New Zealand will continue to have sufficient Southern Cross Capacity to support Government initiatives for high speed broadband adoption in both Australia and New Zealand”
• “The capacity expansion will be based on the installation of additional 10Gbps transmission equipment in each of the Southern Cross cable stations”
• “Southern Cross recently concluded a successfully trial of 40 Gbps transmission equipment on its longest undersea segment between Auckland and Hawaii. While we are very encouraged by the additional capacity growth potential that can be implemented with confidence we are sticking with 10 Gbps equipment for now. This is to minimise the total cost of the current expansion while we clarify our investment plans to build a New Southern Cross Network”.