Are we heading for a glut in sub-marine cable capacity?
One minute we cry “not enough bandwidth”, and then when we wipe our eyes there are three new sub-marine cables in the planning stage. The question will however remain: will the competition be fierce enough to drive broadband prices down?
“Telkom has been holding us to ransom”, claim internet service providers, “they are holding onto the landing rights so they can charge us what they like”.
Various ministries have promised to deal with it and declare landing sites national assets. But what about the new sub-marine cable operators entering the African market, how will they react if government takes action against Telkom? Will they follow next? And why is government talking about a cable project to Brazil?
There are a lot of questions that need answering! Neotel, South Africa’s second national operator, and Seacom, the developer of a private sub-marine fibreoptic cable, which will connect South and East Africa to Europe and India, have agreed to commercial terms for the partnership of landing the sea cable system in South Africa.
Ajay Pandey, MD, Neotel said that through the partnership, Neotel will own the cable landing station and all facilities within the South African territory. The terms of the agreement ensure that the operation of the cable will meet current and future regulations, in line with the Electronic Communications Act of 2006.
Neotel will operate the facilities on an open access basis; Neotel and Seacom believe that such a policy will stimulate the South African international bandwidth market and make available affordable bandwidth to South African customers.
The marine survey for the project was awarded to Tyco Telecommunications. The survey ship, Furgo Gauss arrived in Durban harbour in late June to start surveying the 13 000 km route from South Africa.
The sea cable system will connect South Africa to Europe and India, with the route passing along the East Coast of Africa and through the Red Sea before terminating in Italy. In addition, it will land in Mozambique, Madagascar, Tanzania, Kenya and UAE along the route.
The cable system is planned to be commissioned and ready for service by early 2009, with construction expected to start later this year. The sea cable system has a design capacity of 1.28 Tbps, in order to support the expected exponential increase in demand in 2010 and beyond.
“The cable will offer international capacity on lease and indefeasible rights of usage (IRU) basis at costs that are 70% to 80% less than the current satellite pricing. The expected future demand for bandwidth is expected to grow exponentially, as file sharing and streaming video applications become accessible to the retail user at an affordable price”, says Brian Herlihy, president, Seacom.
“International submarine fibre-optic cables are a necessary complement for the emerging last mile technologies such as 3G, WiMAX and fibre to the home; removing the international capacity bottleneck that exists in the region today”.
The Seacom and Neotel agreement requires complete open access for all carriers to co-locate their equipment directly on the cable. Seacom and Neotel are also in an agreement to provide a backhaul solution to Johannesburg to remove the backhaul bottleneck and permit customers to access the cable directly in a point of presence (PoP) in South Africa’s major business centre, Johannesburg.
Neotel has already launched its wholesale international services as the first-ever truly global Tier 1 operator for South Africa, by extending the vast international network of VSNL International (Neotel’s strategic equity partner) into the country through the PoP in Johannesburg. Neotel’s network enables other South African operators and service providers to directly connect globally from Neotel’s Johannesburg PoP. This capability will grow significantly with the deployment of the Sea cable system.
“We would like to see multiple options opening up for international connectivity from South Africa. We believe that with competitive international capacities available, pricing for international services will become more reasonable, serving to stimulate demand further. The FIFA World Cup 2010 is likely to see unprecedented demand for international bandwidth for its HDTV broadcasting requirement alone, and with various other projects such as the South African National Research and Education Network (SANReN) and Square Kilometre Array (SKA) still in the pipeline, we believe that a strong business case exists for the Sea cable system”, says Pandey.
Meanwhile earlier this year Telkom signed a turnkey supply contract for the EASSy project, a submarine cable system that will link eight countries from Sudan to South Africa via Djibouti, Mogadishu (Somalia) Mombassa (Kenya) Dar es Salaam (Tanzania) Madagascar and Mozambique. The supply contract for the 9900 km cable was signed by the 23 member EASSy consortium with Alcatel-Lucent.
Based on the Alcatel-Lucent sub-marine and terrestrial optical solutions, EASSy will connect the Eastern African seaboard as well as landlocked countries to the rest of the world. It will also provide connectivity across the continent to support the increase in local traffic from existing and future broadband traffic.
The EASSy project will provide up to 320 Gpbs/s capacity and is expected to be completed by the end of 2008.
But two major sub-marine cable projects are not the end of the sub-marine frenzy that has hit the South African market. The government has announced that it is considering a cable between Cape Town and Brazil. Telkom is mum on the issue. Will the Department of Communications run the project?
As they say – watch this space…
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