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MELBOURNE - A new undersea internet cable would break open Australia's broadband market, bringing faster download times and lower prices, federal Communications Minister Stephen Conroy said today.
The A$200 ($229.99) million Pipe Networks PPC-1 cable will rival Telstra and Optus pipelines, linking Sydney to the Pacific island of
Guam to provide a third international broadband link to Australia's east coast.
It is due to open in June next year and Pipe Network executive director Lloyd Ernst today said PPC-1 was undercutting its competitors' prices by 50 per cent.
"One of our potential customers has already made the comment that PPC-1 prices are 50 per cent lower," Mr Ernst told AAP.
At today's launch in Melbourne, Senator Conroy said the new cable "fit very neatly" with government plans for a super fast fibre optic broadband network, by increasing the broadband carrying capacity from overseas.
He hoped to make announcements setting out the pathway for the fibre to the node competitive bid process in the "next couple of weeks".
Senator Conroy said PPC-1 would open up broadband competition, driving down prices and increasing speeds.
"This A$200 ($229.99) million project has the potential to improve Australia's international communications transmission capacity and increase competition in the Australian telecommunications marketplace," Senator Conroy said.
"This is great news for Australia's internet users because the result will be faster and cheaper broadband."
Mr Ernst likened his company to budget airline Tiger Airways, saying he hoped to "disrupt" the broadband market and drive more competition.
"It's a little bit like the discount airline model, the idea behind it is that by bringing competition in and really starting to get people to compete with other, we hope that our competitors will come through and start to be aggressive with their pricing," Mr Ernst told reporters.
"We've really tried to be disruptive with our prices."
He said he hoped competitors would start cutting their prices now the new pipeline was set to go ahead.
"I would hope so, if I was in their position I definitely think that that's what they would try to do," Mr Ernst said.
"This is Qantas discounting their airfares with talk of Tiger starting up."
Internet service providers Primus, Internode, iiNet, Telikom PNG and VSNL are among those already signed up on PPC-1 contracts, making the project viable, despite any price wars which may ensue.
The 6900 kilometre pipe will run through government protected zones, sometimes up to nine kilometres under the sea surface and will connect to existing infrastructure in Guam, a US territory in the western Pacific Ocean which connects to the US and Asia.
- AAP