Southern Cross' recent announcement about its plans to lay a new subsea cable between NZ, Australia and USA is great news for NZ businesses - if built, not only would it provide diversity in terms of our international connectivity but also a lower latency option. Latency refers to the time it takes to send signals (i.e. data) down the cable. Why is latency important? For many businesses (like financial firms, content providers, and cloud computing providers), low latency is critical to their performance and success. For example, in the finance industry, reducing the time it takes to transmit data by even a few milliseconds can impact the profitability of trading operations. For online search companies, like Google, increased latency can result in decreased click-throughs and search result views. Next is promising a decrease in latency of up to 8 milliseconds (compared to the current Southern Cross cable), which would improve business performance and profitability a great deal.
But the distance between New Zealand and the US and the fact numerous packets of data need to be sent back and forth for most computer actions, means that reducing lag by even a few milliseconds can provide a better experience when using more demanding applications.