Vocus quadruples Australia-US subsea capacity

Pacific Fibre failure spurs new agreement.

Internet wholesaler Vocus has increased its capacity on the Southern Cross Cable linking Australia and New Zealand to the US by four times, in a move to consolidate its agreements and meet future requirements.

The move would give Vocus a new 13-year capacity lease on the cable system, the "largest ever increase in capacity" it had taken.

That capacity could increase slightly depending on the network configuration, as the cable system offers paths to the US through either Fiji and Hawaii, or through New Zealand.

Chief executive James Spenceley said the company moved to increase capacity as it reached a "reasonable utilisation" on its existing agreement with Southern Cross.

"We'll bring [the new capacity] online as it's demanded," he told iTnews.

"With capacity like that you tend to pay the operations and maintenance as you get it online so we'll bring it on in step chunks."

The company's acquisition of New Zealand ISP and data centre operator Maxnet earlier this year provided another impetus to renegotiate contracts with Southern Cross.

Vocus would ramp up capacity required for its New Zealand clients as existing capacity contracts there expire.

However, Spenceley said the timing of the capacity buy was largely to do with the recent failure of Pacific Fibre, an ambitious project to link Australia, New Zealand and the US with a direct path cable system.

The project, which had garnered the likes of iiNet and Vodafone NZ as anchor tenants, suffered several hiccups along the way and eventually folded on August 1, removing a potential competitor from the submarine cable market largely dominated by Southern Cross and TPG-owned Pipe Networks.

Southern Cross confirmed at the time that it would not raise prices as a result of Pacific Fibre's closing.

"We were delaying this purchase until we understood more about what was happening with Pacific Fibre — whether we go with a large capacity purchase or some more incremental capacity," Spenceley said.

"Now there's no rival cable, there's no serious contenders for those."

Southern Cross has most recently undergone an upgrade to 40 Gbps wavelength technology aimed at providing a new peak capacity on parts of the system of up to six terabits per second for customers.

The floundered Pacific Fibre project appears to have provided impetus for other capacity increases such as iiNet, which consolidated all of its existing agreements under Southern Cross and assumed Internode's global point of presence network shortly before the New Zealand-led Pacific Fibre cable project failed.

Spenceley said competitors to Pipe and Southern Cross could fit into the market but that the respective upgrade paths for existing cables meant Australia would not likely experience any significant capacity constraints in the near future.

"I think that's one of the things that Pacific Fibre put in the market — these cables are going to run out of capacity, but my gut feel is that they're probably not going to for a long time ... I wouldn't say it's a pressing national interest issue but we're sort of staring too far in the future to make an accurate call on that," he said.