Southern Cross Cable

Why can’t savings flow now?

The monopoly provider of international bandwidth has dropped their prices now that competition is looming:

The operator of New Zealand’s only international internet cable has cut wholesale prices by 44 per cent as one of its potential competitors announced progress on a rival project.

The Southern Cross Cable Network runs between Auckland, Sydney and the United States and transports all the internet traffic coming in and out of New Zealand.

The company – which is half owned by Telecom New Zealand – said cable upgrades and lower costs had allowed it to almost halve what it charges internet companies for trafficking international data.

But despite a sharp drop in wholesale prices, commentators say it could be a long time before these cuts flow through to consumers.

InternetNZ chief executive Vikram Kumar said the lower wholesale rates apply only to new contracts and consumers will need to wait until internet companies re-sign with Southern Cross before prices change.

That is weasel words and excuses. It isn’t like they are shipping oil and need to deplete existing stocks here. It is light! The new prices are available immediately. This is nothing but feather-bedding and continuing to charge customers far too much.

Here is the thing though, if they can offer these pris now with no changes in existing infrastructure, foor how long then have we been ripped off by Southern Cross charging monopoly rents?

Telecommunications Users Association chief executive Paul Brislen agreed the cuts would take a while to reach the retail market.

“It’ll increase data caps eventually, but because the ISPs are buying capacity on a 10-yearly cycle – the contracts run for quite some time – the odds are you won’t mostly see much of anything in the short-term at all.”

I can’tĀ believeĀ Paul Brislen fell for that crap. The supplier can drop the amount they charge their clients anytime they please. He needs to be a little more strident in representing his clients.