Beyond the SEACOM hype

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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SEACOM yesterday announced that its 1.28 Terabits per second, 17 000 kilometre submarine fibre optic cable system linking south and east Africa to global networks via India and Europe has been completed and commissioned.

This is a significant development in the South African telecoms arena, bringing competition to the SAT-3/SAFE system and providing more affordable international bandwidth. 

Apart from a short delay due to pirate activity around the Somali coast, SEACOM was launched as planned despite facing numerous challenges like Government interference and abiding by regulatory requirements in a multitude of African states.

These challenges have delayed numerous other competing projects, but through great business structures and project management SEACOM has managed to stick to its deadlines to connect the East Coast of Africa to the rest of the world via fibre for the first time.

What SEACOM promises

SEACOM is likely to have a significant impact on East Africa’s telecommunications and broadband developments, providing more affordable international bandwidth to many regions which were totally reliant on expensive satellite bandwidth up to now.

Brian Herlihy, SEACOM CEO, said: “Today is a historic day for Africa and marks the dawn of a new era for communications between the continent and the rest of the world. We are proud to be the first to provide affordable, high quality broadband capacity and experience to east African economies. Turning the switch ‘on’ creates a huge anticipation but ultimately, SEACOM will be judged on the changes that take place on the continent over the coming years.”

“The SEACOM cable will change the lives of every man, woman and child in the countries connected by making previously unavailable technology accessible to everyone. We truly look forward to the positive utilisation of the cable and the realisation of infinite social and economic possibilities unleashed by our arrival,” said SEACOM’s Chairman, Mr Nizar Juma.

Shanduka chairperson and SEACOM shareholder Cyril Ramaphosa described the cable switch on as a wonderful and historic event, saying that it heralds the end of waiting for websites or online videos to load, adding that South Africans can now experience the same broadband which users in developed countries are accustomed to.

The reality in South Africa

While the excitement about SEACOM’s launch is certainly justified, references to a massive improvement in Internet access and significantly lower broadband prices may create unrealistic user expectations and a misconception of what SEACOM will bring to South Africa.

In the South African context SEACOM is simply a competitor to the current SAT-3/SAFE submarine cable system.  SEACOM will provide international bandwidth at a lower rate and added redundancy should there be a problem with the SAT-3/SAFE cable.  This in itself is reason to celebrate, but it is important to keep things in perspective – international bandwidth pricing is merely one component of a broadband service.

Another point to keep in mind is the capacity of the new cable.  While SEACOM has a design capacity of 1.28 Tbps, only 80 Gbps is currently ‘lit’.  This capacity can be upgraded if needed, but it is still less SAT-3/SAFE’s current 120 Gbps.  Telkom has also indicated that the SAT-3/SAFE system will be upgraded to 340 Gbps, nearly tripling current capacity.

International bandwidth pricing and broadband access

A reduction in international bandwidth prices should result in higher monthly usage limits (caps) and/or lower bandwidth costs, but a variety of other factors like last mile access, transmission network capacity, national bandwidth costs and end user equipment costs are unaffected by SEACOM’s arrival.

So while numerous people are already preparing for a massive broadband explosion in South Africa and the East Coast of Africa, very few answers are provided about how this bandwidth will be delivered at an affordable rate to consumers spread out across a vast area.

Wireless technologies like HSDPA and WiMax are widely touted as the solution to Africa’s broadband problems, but these technologies remain costly and it is debatable whether they will ever be able to rival fixed line technologies like ADSL and fibre.

In South Africa Telkom still holds all the cards regarding fixed line broadband access (in the form of ADSL), and it is unlikely to change soon.  Telkom therefore has a fair amount of control over ADSL prices and ADSL speeds in the country, something which SEACOM’s arrival will not alter.

Wireless broadband services like iBurst, Neotel’s CDMA offerings, Vodacom and MTN’s HSDPA and iBurst’s WiMax provide competition to ADSL, but it is again debatable whether these wireless services can provide the same service levels and pricing associated with fixed line services overseas.

Still a great development

Despite the fact that it may take time for the benefits of SEACOM to create the broadband environment envisaged by Herlihy and Ramaphosa, the benefits of additional international bandwidth capacity and lower international bandwidth pricing are undeniable.

Price reductions in the ADSL ISP market have already started, and this is likely to continue as service providers get their hands on more affordable international bandwidth.  Neotel, which is SEACOM’s landing partner in SA, is likely to launch more competitive broadband services, which in turn places pressure on competitors like Telkom, Vodacom, MTN and iBurst.

Neotel, which now has access to both SAECOM and SAT-3/SAFE, will immediately be able to pass the advantages of the new cable system on to companies and consumers.  “Neotel will make use of SEACOM to augment its existing capacity on SAT-3/SAFE, increasing the available international bandwidth, as well as the level of reliability of international links,” says Dr Angus Hay Chief Technology Officer at Neotel.

“The impact of SEACOM will be immediate, since it is expected that several telcos and ISPs will start to make use of some capacity as soon as it is available.  Over time, SEACOM will enable Neotel to continue to deliver high-speed services to a growing number of corporates and consumers, without the growth of international capacity being constrained as in the past,” said Hay.

SEACOM is viewed by many observers as a first step in the bandwidth price war, with other cable systems like EASSy, WACS and Main One all set to bring more competition and lower bandwidth to South Africa.

So while some of the benefits in terms of affordable broadband may only be felt later, SEACOM may well be a landmark development which will change the way local consumers use the Internet in future.

SEACOM and broadband – give your views