PIPE Networks is to go ahead with its $200M plan for a new international link between Australia and Guam.

Guam is an ideal destination as it already has significant connectivity to other countries such as Japan and the US.

iiNet has announced this morning that it has signed up to use the link for 15 years as a "foundation customer". Other foundation customers include Internode and Primus. "This agreement will provide iiNet with long term supply certainty and significant cost savings", said iiNet managing director Michael Malone.

The link will break an essential duopoly on international traffic by the Southern Cross Cable (SXC) and Australian Japan Cable (AJC), which are mostly owned by Optus and Telstra respectively.

"Foundation customers...are the real champions of competition", said PIPE CEO Bevan Slattery. "They wanted a change from the same old overpriced bandwidth product available for the past 8 years. We all realised that this is the last chance to break the Gang-of-Four's stranglehold on international capacity pricing into Australia. All Australians will benefit from their vision and belief that the days of paying too much money for too little bandwidth had to end.

Initially announced late 2006, the cable is expected to be completed in mid to late 2009 with potential capacity of 1.92Tb/s. Telstra is also planning a new link to Hawaii to be finished later this year.

Links:

• PIPE announcement  (ASX, 14 Jan 2008)
• iiNet announcement  (ASX, 14 Jan 2008)
• PIPE Networks plans new international link  (Whirlpool, 18 Dec 2006)