Internode boosts international cable capacity

By mid-2008, SCCN will increase the direct US capacity it provides Internode by one third. Independent telecommunications analyst, Paul Budde stated that international capacity has been one of the major challenges for broadband providers in the local market.

“One of the biggest problems in broadband is the bottleneck in international connection,” he said. “Internode has been talking about extending its international capacity for many years.”

According to Budde, the deal can potentially strengthen Internode's local presence to a level that may challenge key players like Telstra and Optus. He added that the main winners will be customers who will benefit from more competitive broadband prices.

“The price of broadband has been held rather high by Telstra and Optus, so having Internode in the picture adds a competitive element,” he said. “Long term contracts like the one between Internode and SCCN gets everyone nervous and creates a better environment for Internode to sign better deals.”

Budde claimed the agreement is a byproduct of increased demand for broadband capacity in Australia and Internode’s desire to capitalise on this growth market.

“When there is a demand in capacity of 100-fold and 1000-fold increase in traffic, you’re putting strain on the international network,” he said. “To participate in the international media you need to tap into the services available through the international network.”

Internode currently has approximately six gigabits per second of international circuit capacity to the US through SCCN and Australia Japan Cable (AJC), representing a 10-fold increase since Internode started using SCCN capacity in March 2005.

The contract will go ahead as Stephen Conroy, Minister for Broadband, Communications and the Digital Economy instigates a national report on the importance of international capacity to the national economy.