Seacom cable brings the rain
Last Thursday, the long-awaited Seacom undersea cable went live, bringing with it a glut of superfast Internet connectivity. There was a glint in the eye of many an Internet industry executive at the Neotel datacentre in Midrand, where the function was held. Journalists, who were treated to these real broadband speeds, could barely contain their glee.
Let’s stop for a moment and applaud what Seacom CEO Brian Herlihy et al have achieved by completing the 600-million, 17000km cable running down the east coast of Africa, connecting up several east African countries and India.
All the news around Seacom has smacked of hyperbole, sure, but it’s conceivable that soon, many of the Internet services that geeks hanker after will be available. This is especially true for bandwidth-intensive video services such as that used to stream Herlihy and Tanzania’s president from the launch there.
Cisco’s vice-president for Africa, Yvon le Roux, put it best: “YouTube provides an excellent example of how video is shaping how we all communicate. By the year 2013 IP traffic will reach two-thirds of a zettabyte. That’s 667 exabytes — if we bring it down to Earth it’s approximately 10-billion DVDs per month.”
But how soon will these speeds reach consumers, and where are those promised price cuts?
The situation is much more complex than it seems. While Herlihy says wholesale Internet prices have come down by about 90% since the cable was announced in 2007, Internet service providers are locked into old prices for a while yet.
Telkom — which last week announced, pre-emptively, that it’s increasing the current Sat-3 cable’s capacity from 120 Gigabits per second to 340Gbit/s — sells access on five-year contracts to what was the only undersea link.
Many ISPs sign a variety of such contracts, for different amounts of capacity, but the sudden influx of capacity Seacom offers (1.28 Terabits per second) will be eagerly gobbled up.
I put my price war question to several of these executives, some of the most significant people in the industry, and most demurred with polite, commitment-avoiding questions.
But privately they concede they’re all eyeing the champ (Telkom) and looking for a takedown. The opportunity to get out from under Telkom’s state-sanctioned yoke seems finally to be upon us.
Telkom is already in trouble. Profits are down, according to its latest results, and it unloaded its cash cow Vodacom after years of animosity between the two; while its broadband offerings are frankly pathetic. Vodacom actually has more broadband subscribers, which in any other country where fixed-line operators provide millions of people with Internet connectivity, would be seen as a reflection of how scandalous Telkom is.
And, as the FM’s Duncan McLeod reported last week, Telkom actually loses money on the line rental it charges its customers because it doesn’t cover the cost of providing that service.
This is called access deficit and when what’s called “carrier preselect” is brought in sometime in the next few years —where you can select another service provider to make your phone call through — Telkom will be in even more trouble.
Now that Seacom is finally here and active, let’s hope something significant will come to all us long-suffering Telkom broadband users. Bring the rain.
SEACOM and broadband discussion
The Times
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