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RE: New TransPacific Cable Projects:
- From: Rod Beck
- Date: Sat Sep 22 05:36:50 2007
Title: RE: New TransPacific Cable Projects:
It is not obvious to me that there is a Pacific cable capacity glut. For example, I sold a DS3 from LA to Hong Kong for $6K MRC whereas the last time a wholesale TransAtlantic DS3 rivaled that figure was 2001.
Now you could argue that one needs to look at pricing on a mileage-adjusted basis since the typical TransPacific cable spans a much greater distance than its TransAtlantic counterpart.
But operating costs are not proportional to mileage - the bulk of your operating expense is what you pay the undersea maintenance companies such as Global Marine and Tyco Submarine and Alcatel. And their annual charges are not very sensitive to distance.
What is peculiar about the Pacific is the lack of new products. For example, it's extremely difficult to get any Ethernet transport on many routes such as LA/Sydney or into India.
Yes, there is some Ethernet/IP junk, but that doesn't meet most of my clients' performance standards. It is IP masquerading as Ethernet.
In fact, it is very difficult to find Packet-over-SDH Ethernet even on the all-important LA/HK route.
To sum up, I do believe the median Pacific cable enjoys a substantial margin advantage over the median Atlantic
There is only TransAtlantic cable that is particularly well right now, largely due to its unique physical diversity and footprint.
Roderick S. Beck
Director of EMEA Sales
1, Passage du Chantier, 75012 Paris
French Wireless: 33-6-14-33-48-97.
AOL Messenger: GlobalBandwidth
``Unthinking respect for authority is the greatest enemy of truth.'' Albert Einstein.
From: [email protected] on behalf of Deepak Jain
Sent: Sat 9/22/2007 12:44 AM
To: nanog list
Subject: New TransPacific Cable Projects:
This is what happens when I stay late at the office on a Friday.
http://www.commsday.com/node/186 - Google participating in a new
Transpacific Cable Project
Verizon on a different transpacific project
And all the same articles say there is already an overpriced glut of
capacity along these routes and a glut of fiber laying ocean vessels.
Good times. Rather than having competition, everyone is just building
their own routes that they won't share at wholesale prices to folks in
the wholesale buying business. :)
Ahh... reminds me of the late 90s when everyone was building dark fiber
networks for the surge of demand that was coming. Now, the remaining
folks are buying up all the unused bits to constrain capacity.
If I were a stakeholder in transpacific cables, I'd be leasing up the
next 3-6 years of the entire global cable laying fleet. :)
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