Today Ciena (NASDAQ:CIEN, news, filings) announced a key submarine upgrade contract with Southern Cross, which connects California in the North Pacific with Australia and New Zealand in the South Pacific, making a stop in Hawaii along the way. Southern Cross will be upgrading from 10Gbps to 40Gbps on all segments, including the longest one spanning 8,000km. The upgrade will effectively double lit capacity on each cable from 1Tbps to 2Tbps.
Ciena is providing a range of equipment, software, and services to power both the upgrade and a simplification and automation of Southern Cross's operations. It's not a new contract of course, Ciena was powering the previous 10Gbps system as well. This upgrade has been in the works for a while, having been discussed last year in the context of Southern Cross's extension of the guaranteed life of the consortium. Southern Cross also successfully trialed 100G over the summer during testing of this 40G upgrade, so there may be more yet to come.
Southern Cross is facing a challenge to its dominance of the NA/AU/NZ bandwidth market from New Zealand based Pacific Fibre, which is planning a new 10Tbps cable system and has already lured away Vodafone as a customer over the summer. The region's bandwidth needs are projected to grow rapidly, however, so perhaps there is plenty of room in the long term.
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