Telkom launches new City to City IPLC service

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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Telkom has announced the launch of its new City to City International Private Leased Circuit (IPLC) service.  This service will offer clients full circuit connections from Johannesburg to London – similar to SEACOM’s current services.

Undersea cables & SAT3

By 2011, there will be at least nine undersea telecommunications cables connecting various parts of Sub-Saharan Africa. Figures from 2003 to 2009 indicate that STM-1 International Private Leased Circuit (IPLC) pricing to Europe has seen a substantial reduction, while cable upgrades have contributed significantly to total available capacity.

SAT3 and SAFE commenced service in 2002 with only 20Gb/s of capacity, but by October 2009 both cables are to be equipped with 300Gb/s. During the period from 1993 to 2009 the total investment in cables continued to accumulate while prices per gigabit after each upgrade continued to reduce. This is owing to that fact that technology continually changes and land-based equipment needed additional upgrades.

Alphonzo Samuels, Telkom Managing Executive for Wholesale Services, explained that “In essence, statistical trends clearly show that while capital investment and overall cable capacity have been significantly enhanced over the recent years, the costs per Gig capacity over the concomitant period have drastically dropped.”

“From a Telkom perspective, between 2002 and 2009, there has been an IPLC price decrease of 90% since the inception of the SAT3/WASC/SAFE cable system – S3Ws for short. What this essentially means is that Telkom has enabled the market to pass on price reductions to their customers,” said Samuels.

Samuels added that participating in well-financed cable consortiums with African and global operators ensured Telkom ownership in numerous geographically relevant cables, without having to fund the full cost on their own.

Telkom’s investment contribution includes COLUMBUS3, SEA-ME-WE3 (South East Asia-Middle East- Western Europe), SAT3/WASC/SAFE (South Atlantic Telecommunications/West Africa Submarine Cable/South Africa Far East), EASSy (East Africa Submarine Cable System), EIG (Europe India Gateway) and WACS (West Africa Cable System).

“We prefer to invest in consortium cables as consortiums comprise global operators with financial strength, operating experience, significant customer bases and market share as well a diverse revenue streams,” said Samuels.

“Our investments are therefore geared by the participation of other operators and we firmly believe that investment sharing translates to better unit costs and improves customer prices,” he added.

Samuels stressed that it was important to compare “apples with apples” when talking about undersea cable bandwidth prices. In general, when purchasing undersea bandwidth with Telkom, customers acquired redundancy, security, preventative maintenance, protection, restoration, superior availability as well as a proven track record in excess of 15 years.

“We are confident that Telkom offers all this and, as from today, has even diversified our international undersea cable product offering to cater for different market needs. Telkom offerings to date have only been premium packages but as of today (12 October 2009) a new IPLC product called City to City has been launched by Telkom,” announced Samuels.

City to City

Telkom officially launched its new International Private Leased Circuit (IPLC) product called City to City.  This new offering is a full circuit from Telkom’s Barrack Street or New Doornfontein exchanges, via Melkbosstrand to Telehouse East, or Telecity 1 in London.

The initial offering will be a 155Mb/s STM-1 connection. The connection will be route specific, and access to the customer premises from the Telkom point-of-presence is excluded.

Plans for the service include more foreign destinations, and the expansion of the national network to include Carrier Neutral Facilities. The half-circuit IPLC connection is still available and Telkom plans to expand their IPLC portfolio in future.

The new City to City service from Telkom will compete directly against SEACOM’s Johannesburg to London circuits.  Telkom did not divulge any pricing, but to compete effectively against SEACOM it will have to be priced similarly to SEACOM’s STM-1 cost which ranges between R 698 000 (one year lease) and R 493 000 (five year lease) per month.

Telkom City to City IPLC service – comments and views