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WACS and broadband prices in SA
| Rudolph Muller | January 12, 2012 | 6 comments |
Rudolph Muller
Rudolph Muller is the editor at MyBroadband and covers telecoms and broadband news. Rudolph comes from an academic background, but left the University of...
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Consumers should not expect significant broadband price cuts when WACS launches later this year
WACS (West Africa Cable System) is set to go live in South Africa in the second quarter of this year (2012), significantly boosting South Africa’s international bandwidth capacity.
WACS has a design capacity of 5.12Tbps, but according to Neotel who will run the cable system’s Network Operating Centre (NOC), it is set to increase South Africa’s current broadband capacity by around 500Gbps.
Some consumers may expect broadband prices to decrease sharply when the additional bandwidth goes live, but this is unlikely to be the case.
International bandwidth only makes up a small portion of the overall cost of a broadband service. This coupled with the fact that international bandwidth prices already declined significantly with SEACOM’s arrival, means that the impact of WACS on local broadband prices may be minimal.
MWEB CEO Rudi Jansen explained that the big move on international costing has already happened with SEACOM coming to the market.
“I do not expect that WACS will be a catalyst for change to the same degree as what SEACOM has been to date,” said Jansen.
Derek Wilcocks
Internet Solutions MD Derek Wilcocks agrees that WACS will not result in significant broadband price cuts.
“This is because international connectivity is no longer the key driver of ADSL pricing, and it hasn’t been this way since Seacom went live. The industry continues to be hamstrung by the local factors at play, like access to the local loop and IPC pricing, Wilcocks explains.
Openweb founder Keoma Wright agreed, adding that he does not expect a big difference when WACS launches.
Cybersmart MD Laurie Fialkov says that all ADSL prices have already been adjusted in anticipation of international price reduction on WACS.
Neology CTO Roelf Diedericks also feels that WACS will not result in significant price cuts at this stage. “International capacity pricing might once again see a reduction, but I don’t think it will be drastic,” said Diedericks.
However, this does not mean that WACS will not bring benefits to South African broadband users.
Jansen highlighted that WACS will improve resilience in most ISP networks.
To date SAT-3 was the only international cable system in South Africa on the West coast of Africa, and with WACS an ISP can build a fully redundant system using SEACOM and WACS.
Fialkov concurred with Jansen: “The biggest single difference that WACS makes is cable system redundancy. With 3 cable systems you can run 66% full on each link where with 2 cable systems you can only run 50% full in order to be able to fully restore a service.”
“We will see more redundancy options available and hence more reliable international services,” added Diedericks.
