SEACOM’s effect will take time

Bandwidth price decreases will not happen overnight, warn experts

The East Coast undersea cable system SEACOM is widely seen as a significant development in the South African telecoms market, promising to reduce the cost of international bandwidth and drive down broadband prices.

SEACOM is set to become operational in less than two months with many commentators predicting international bandwidth price decreases of up to 90%.   These predictions may be optimistic, and some industry players have warned that price decreases will be a gradual process.

Internet Solutions (IS) CEO Angus MacRobert said that there will be a small pricing decrease when SEACOM becomes operational, but that it will not be ‘a substantial one’.  MacRobert does not believe that a 90% reduction in international bandwidth is realistic. 

The IS CEO pointed out that SEACOM is a ‘standalone’ cable system which does not provide any redundancy.  This means that current SAT3/SAFE clients will initially only use SEACOM for cheaper additional capacity.

IS has invested in SEACOM – as an anchor tenant – and in the West African Cable System (WACS), which will provide the company with much lower international bandwidth prices in future.  MacRobert predicts that the truly ‘substantial reduction in international communications’ will only arrive when the WACS becomes operational in around two years’ time.

The time frame in which cheaper pricing from SEACOM will filter down to consumers is also debatable.  ECN CEO John Holdsworth warned that consumers should not expect overnight results, and that the impact of developments, like lower international bandwidth prices from SEACOM, may only be felt long after the cable has landed.

SEACOM discussion