Southern Cross offers a number of options for the utilisation and/or ownership of capacity across the Southern Cross network, from simple Leases to IRU (Indefeasible Right of Use) ownership.
Further, with Southern Cross capacity you are not locked into a particular configuration or capacity option, thanks to our unique ‘miu-point’ system, but can augment your existing investment (if necessary) to re-configure your capacity as your business needs change.
An ‘Indefeasible Right of Use’ (IRU) contract provides the ability to access Southern Cross capacity for the term of the contract (currently ending on 15 November 2030). As such, even after completion of payment of the IRU (typically 1 to 3 years, refer Payment Plan Options), the client maintains the right and ability to continue to use the capacity for the contract period at no additional purchase cost. Operations & Maintenance (O&M) charges (which Southern Cross charges at cost) continue to apply.
This provides a highly cost effective method of securing long term capacity at a known cost base, while maintaining the ability to leverage the investment to cater for changes in configuration and/or business requirements.
While Southern Cross makes no representations and a customer must rely on their own advice, an IRU can also typically be treated and accounted as a capital asset with associated depreciation benefits.
All configurations and all capacities available can be purchased as an IRU. Purchase Volume discounts are available and capacity purchases can be paid for by using Southern Cross Payment Plan Options. We can work with customers on flexible payment arrangements.
A ‘Lease’ contract provides the ability to access capacity only for the period of the Lease. After completion of the Lease period, the user no longer has access to, or any right to, the capacity and would need to secure a new lease. As such, it would require multiple back to back leases to achieve the same ‘tenure’ available under an IRU.
Leases are typically available from 2 to 4 years, with associated payment profiles, and are available on a limited set of Southern Cross capacity & configuration options. As Lease payments incorporate an O&M cost, no separate O&M fee is leveraged. Leases are billed monthly in advance.
While Southern Cross makes no representations and a customer must rely on their own advice, a Lease is typically treated and accounted as an operating expense, without the same associated Balance Sheet Liability implications as an IRU.
Southern Cross Lease contracts also provide customers the flexibility to enter into an initial Lease contract, but retain the ability to convert to an IRU contract at or before contract expiry, and as such provides a ‘half way house’ solution between an IRU and a basic Lease. The user can access capacity for the period of the Lease (with all the Lease implications as outlined above). At some future point (at or prior to Lease expiry), the Lease contract can be converted to an IRU contract providing the long term benefits of an IRU.
The incremental cost to convert the Lease to an IRU is calculated based on the IRU price at the time of Lease contract signing plus an associated Conversion Fee, less any Lease Contribution Amounts, at the time of conversion. Lease Contribution Amounts represent a proportion of the monthly Lease payments paid, and vary based on the term of the initial Lease.
Further details on leasing or IRU conversions are available on request.
Payment Plan Options
Southern Cross IRU contract payments can be structured to be spread over an extended period of time, typically 1 to 5 years, for a nominal additional interest charge. This allows the benefits of IRU ownership while managing cashflow requirements. For further details or if you have specific requirements, please contact us to see how we may be able to cater for your needs.
For further information about Southern Cross Product Options and what will work best for your organisation, please contact:
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