Profits flow from under sea

The Southern Cross cable, of which Telecom owns half, has moved into the profit zone with the $US1.1 billion ($2.5 billion) project reaching $US1.6 billion in sales.

The high-capacity fibre-optic cable network that links Australasia with North America has picked up another $US443 million in sales after a meeting of potential buyers in Hawaii last August.

Asia Pacific market director Ross Pfeffer said capacity was sold for 15 years and payments were received as soon as use began. Users also made further quarterly payments to cover the upkeep and operation of the cable.

He anticipated that payments not yet received would be paid this year or within 18 months.

But despite the project already more than covering its costs, only 40 per cent of the present 120Gbits/s (gigabits a second) capacity has been sold.

The cable is scheduled to go to 240Gbits/s by the end of next year, and there is still the option to go to 480Gbit/s.

Mr Pfeffer said improvements in fibre-optic technology had enabled more colours of light, and thus more information, to be fired down the cable. This meant upgrading to a higher capacity than initially contemplated would not cost a great deal more because it only required modification of the land-based facilities.