Perth-based internet provider iiNet has now moved quickly to secure capacity on the brand new Pipe Networks’ $200 million Sydney-Guam undersea cable. The new cable also sees the Southern Cross cable (owned by Optus and Telecom New Zealand) no longer having a monopoly on the US-bound cable.
The third largest ISP has said that it will switch between 40 and 50 percent of international bandwidth onto the cable when it goes live in 18 months. The switch is part of a 15 year supply agreement between the two companies.
Spokesman Greg Bader said the deal would allow the ISP to keep its prices in reach of customers.
“The cost of international IP is the single biggest cost issue for broadband plans in Australia. The larger the (download) quota you have the more you pay and that’s a direct relationship to the cost of international transit.”
International bandwidth accounts for around 15 percent of the company’s cost, iiNet said in a statement to the Australian Securities Exchange (ASX).
Communications Minister Stephen Conroy officially announced the project in Melbourne earlier today.
The cable, dubbed the PPC-1, was part of a plan to spend $4.7 billion on a new national Fibre-to-the-Node (FFTN) broadband access network.
“This $200 million project has the potential to improve Australia’s international communications transmission capacity and increase competition in the Australian telecommunications marketplace,” the minister said.
“This is great news for Australia’s internet users because the result will be faster and cheaper broadband,” he added.
Mr Bader said that iiNet would continue to retain some capacity with its current providers after the new undersea link is completed.
The 6900km pipe will run through government protected zones, some which are up to nine kilometres under the sea surface and will connect to the current infrastructure in Guam. Primus, Internode, Telikom PNG and VSNL have also signed up.