Cable access to improve Neotel’s independence
Fixed-line operator Neotel has secured access to the landing station for the SAT3/Safe submarine cable, enabling it to carry international voice and data traffic at competitive prices.
Local landing rights to the fibreoptic cable were held exclusively by Neotel competitor Telkom until the end of last year. This exclusivity restricted the ability of operators to cut international bandwidth prices.
SAT3 links South Africa directly to Spain and Portugal, while Safe extends the link via Durban to India and Malaysia.
Neotel’s access to the landing station is expected to give consumers a wider choice of operators and lower prices.
Chief technology officer Angus Hay said Neotel had obtained international capacity on SAT3/Safe at competitive rates, and was able to pass the cost benefits on to customers.
“For the first time, users of international leased-line telecoms services … have a real choice of carrier, rather than just of reseller, enabling them to switch to their preferred provider, or simply to implement redundancy to reduce their business risk,” Hay said.
Neotel has deployed its own equipment at the SAT3 landing station in Melkbosstrand and the Safe station in Mtunzini.
This enables Neotel to connect traffic from Europe and the Far East directly into its national network through the company’s own fibreoptic cables.
Rudolf Muller, the founder of MyADSL, said Neotel’s direct access to the cable and the landing stations meant that South Africa had real competition in the international bandwidth market for the first time.
“Just the notion of competition already forced international bandwidth prices down,” he said. “And Telkom announced another price reduction around the time when Neotel gained full access to the cable system.”
There would be some restrictions because SAT3 was run by a consortium, he said, but the fact that Neotel could now effectively carry terrestrial bandwidth between London and Johannesburg without touching Telkom’s network “is a great leap forward for the local telecoms market”.
Neotel already owns the local arm of Seacom, the undersea cable that will link the east coast of Africa with India and Europe. The cable is expected to go live next year.
Neotel is also involved in the west coast cable of the state-owned Infraco.
Last week Neotel posted R1 billion in revenue for the 12 months to March, which was expected to double this year.
The company will launch consumer services such as voice and high-speed internet at the end of the month, starting with Johannesburg and Pretoria.
Business Report
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