The emerging disruptive players

At Pacific Fibre we see the relentless rise of end-user demand for capacity, and are working to help the industry by unlocking the international bottleneck that we see now, and most certainly see in the future.

We are, however, relying on the rest of the industry to provide us with that demand, and the infrastructure between the POP where the Pacific Fibre cable will terminate and each premise needs to be able to absorb the increase in capacity.

The NBN and Ultra Fast Broadband initiatives, along with substantial industry investments (by Telstra and Telecom in particular) are making giant steps towards delivering that infrastructure.

We are also relying somewhat on the ISPs and Telcos to progressively change their deals to push higher speed services and help change end-user behaviour. Again this is not a problem that we seek to solve ourselves, but one in which we have a role to support the industry.

Enter the first disruptive player – Exetel. Exetel are going to offer 25Mbps connections over the NBN fibre in Tasmania for no monthly charge – charging $1 per GB downloaded. They will offer even higher speed connections for a fixed price plus the $1/Gb/sec, though they anticipate a fixed price of just $15 for 50Mb/sec and $25 for 10Mb/sec.

Their pricing is aimed at the majority of people that are not super-heavy downloaders, and that’s going to make it an easy decision for those customers to switch to fibre. However once they experience the speed of fibre we anticipate that the natural increase in demand for data will drive some very positive economics for Exetel. Exetel do have some cost issues to deal with – the Bass Straight cable is expensive and of course they need to pay for that international capacity.

It’s only 2010, and we are expecting a lot of changes to happen in the market before our main cable to the USA goes live in 2013. This is just the beginning.