The first stage of an upgrade of the submarine Southern Cross Cable linking New Zealand and Australia to the United States has added 260Gbps.

However, the upgrade meant the cable, half-owned by Telecom New Zealand, would keep ahead of demand for just a short time, and additional upgrades had been planned for the network's remaining 16-year lifespan.

The push for high speed broadband Internet has increased demand for capacity. At the end of the current project, the cable's capacity will increase to 860Gbps by the end of the year, sales and marketing director Ross Pfeffer said.

"High speed broadband requires both capacity cost to reduce and capacity supply to each subscriber to increase considerably," Pfeffer said.

The upgrade, which was launched yesterday, installed an extra 130Gbps to each of its two fibre-optic cables crossing the Pacific, increasing capacity by 10 times and lowering capacity cost, he said. There had been no disruptions to service.

The Australian capacity market was increasingly competitive, while in New Zealand Southern Cross was the only significant supplier. However, the cable owners would continue to price capacity from Australia and New Zealand on the same basis, with prices likely to continue falling.

The Southern Cross Cable network, commissioned around seven years ago at a cost of US$1.3 billion, comprised two submarine communications cables with a total capacity of 80Gbps, linking Australasia with global Internet hubs on the US west coast.

Other owners in the Southern Cross Cable Network are Singtel-Optus with 40 percent, and Verizon Business with 10 percent.