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The Affect of SEACOM on Africa

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BusinessDay

THE global economy is driven by the internet and online communication between branches and companies, and most of the content business users and consumers access on the internet is held on servers and databases outside SA.

International bandwidth capacity is therefore crucial, which is why undersea cables are a critical component of SA’s broadband infrastructure, says Angus Hay, Neotel’s chief technology officer.

In the local market, international bandwidth capacity relies largely on a single undersea cable, SAT-3/WASC/SAFE, and until recently Telkom has had exclusive rights to the SA landing portion of this resource. But in terms of the Electronic Communications Act, other operators now have access to the cable, although Neotel is the only one that can take advantage of this because it has an international licence, says Hay.

He says Neotel leases raw capacity on SAT/3 SAFE and can resell it to other operators and service providers wholesale and bundle it with services for businesses and consumers, such as internet access and telephony.

However, with the rapid increase in internet traffic, the capacity of this cable is being taken up fast. This situation will be relieved by the new Seacom undersea cable, which will connect SA and the East Coast of Africa to the rest of the world and is expected to be in operation by the end of 2009, he says.

The philosophy behind the Seacom cable is to provide open access, says Hay. In partnership with Seacom, Neotel is landing the cable in SA, which means it will own the rights to it in the country, but operators and service providers will be able to purchase raw capacity on the cable directly from Seacom.

“We want to increase the size of the market and do not have a problem with competition.”

Many global outsource companies and online companies like Google have elected not to base their online servers in this country due to lack of international capacity and high prices, but Seacom will help to change this, says Hay.

He says over the past two years there has been a 65% reduction in the lease price of bandwidth on undersea cable in SA, but it still costs double against Europe and the US.

“We are expecting a dramatic drop in prices with Seacom.”

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Written by techran

September 22, 2008 at 5:03 pm

Posted in Industry News

Tagged with ,

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