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’t believe 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.


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  • Korau

    As soon as the first supplier starts selling at this new rate, the others will magically be able to follow suit. Otherwise they will have few customers left!

  • pidge

    Especially since the ISP don’t seem to know how to meter usage accurately – I’ve been monitoring my at my ASDL router (i.e. counting every last byte that goes in and out over the connection), and for my December month my monitoring says I’ve transferred about 40GB (damn You Tube).  ISP reckons it’s 76GB. WTF?

    • James Gray

      Hate to be a wet blanket here, but your $10,000 equipment and routers on the other end.

      Also things like Layer 2 vs. Layer 3 measurement can yield quite a differenceHave been through this a couple of times with customers monitoring being short of what their ISP has billed them for, the solution is more often than not their own monitoring isn’t counting every packet correctly, or is counting packets when the data contract says frames.

      • pidge

        Fair enough, so I shouldn’t rely on the ATM interface (Layer 2 last time I checked) Bytes in/Out?  I thought that would read high, but a discrepancy of 40-something GB vs 76 GB is a little stunning.  One day alone they’ve got 20GB vs mine of 5GB.  I wonder if they also count data that doesn’t even make it to my end of the wet piece of string?

      • James Gray

        Can’t really say for certain, even telecom wouldn’t go that far when we were querying a bill for a CID connection (where a four figure bill is normal and blowouts get to five figures).

        My experience with consumer grade routers is that once it “makes internet go”, this is the end of end of the testing process… some of them wont even handle simple things like reassigning DHCP pools. Wouldn’t trust them to count sheep, let alone frames.

      • Anonymous

        Agree with Pidge Telecon are a bunch of thieving Arse Bandits.

    • Anonymous

      Agree with Pidge Telecon are a bunch of thieving Arse Bandits.

  • Guest

    How about this for irony

    • Anonymous

      Agree with Pidge Telecon are a bunch of thieving Arse Bandits.

  • James Stephenson

    “if they can offer these pris now with no changes in existing infrastructure,”

    Except that it’s not with no changes, they’ve just switched on their new Ciena 40G+ transmission gear.

    • Anonymous

      Agree with Pidge Telecon are a bunch of thieving Arse Bandits.

    • Anonymous

      And in layman’s terms, that means?

  • Anonymous

    One word. TELECON
    It sounds like they have just signed up there customers to 10 year contracts then announced a rate drop 1. As a PR exercise and 2. To discourage new competition.
    We have been right royally raped by TeleCon for years.
    When I travel overseas, several times a year, I put a message on my mobile saying tough luck overseas. I certainly don’t use International roaming @ $3 per minute + my usual charges when I can get an international sim and call back to NZ for 5 to 15 cents. 5 cents to landlines and 15 cents to Mobile, it is the most expensive country to call mobiles, to most it is 5-7 cents. And that is prepay.
    Broad band is even worse twice the price and half the speed. The real difference is that we have data caps, so the faster the internet the faster you use up your Data for the month.The rest of the World is going or gone no limit.
    Did a survey a month ago they were testing to see how much they could charge for there new high speed network, that we are paying for and don’t forget that this Government has exempted them from commerce commission oversight. Nothing to do with cost of supplying the service, just how much can we charge. Told them to go “Fuck themselves” long and hard.
    Don’t expect any help from our limp dick Politicians.

  • Geoff

    I’m on a naked DSL plan here in Oz. When I first signed up it cost $60 for 8Gb/8Gb peak/ offpeak. Three years later I’m still paying $60/mth, but get 50Gb/50gb. Why? Cable competition into Oz is why.

  • Steve (North Shore)

    I have said for a long tom that Telecom need an image change and a new name.
    “Pelican” is a good name, then they can both stick their bills up their arse

  • Kane

    Not all ISPs charg huge amounts for small data caps. Orcon and Slingshot do not. I use Slingshot and get 100 GB for $60 (after upgrading from $50 for 50 GB). They also charge just $90 for unlimited broadband. Those charges are for those that do *not* have either their landline or just tolls with Slingshot. If you have tolls with them it is $5 less. If you have a landline with them it is $10 less. They even have unlimited naked DSL on special for $90 right now (normal price is $110). Orcon is not as good, but still an easy second place and well ahead of the rest.

    • Anonymous

      Orcons service is absolute shite though.

  • Gah

    Ernie would’ve been stringing them up!

  • Paul Rain

    Little unsubtle- obviously, the prices are fixed in the contracts. On the other hand, the companies concerned ought to already be talking to Southern Cross about how they’re going to be paying a certain amount under the present rate on their next contract, that will make up for overpayment from their current contracts.

    In fact- they probably are. But fat chance of that getting passed on.

  • Killjoy

    Its like the traffic jams… They talk about savings but one company slows a bit and before you know it, no savings anywhere and all promises of such have stalled!