More than a connection
When Neotel announced in April that it had finally got direct access to the landing stations of the SAT-3/SAFE undersea cable – which connects the continent’s telephone systems to the world – at the Melkbosstrand in the Western Cape and Mtunzini in KwaZulu Natal the statement went almost unnoticed.
That announcement, though, brought to an end the monopoly that its fixed-line rival, Telkom – which controls the site – had always had over SA’s telecommunications with the outside world.
Access to the landing site means that Neotel has truly become independent from any other operator. It can now carry traffic from Johannesburg to London on its own network, says chief technology officer Angus Hay. “There is no dependence on Telkom’s network, we are not selling a Telkom service,” he says with a smile.
Neotel now has its own equipment at the Melkbosstrand and Mtunzini landing stations.
“For the first time, users of international leased line telecommunications services out of SA have a real choice of carrier, rather than just of re-seller. This will enable them to switch to their preferred provider, or simply to implement redundancy to reduce their business risk,” Hay says.
He refuses to divulge the details of deals between Telkom and Neotel regarding the landing sites but stresses that it gives his group a steady base to compete with Telkom.
“We get fairly good pricing but we need more bandwidth,” he says.
Ironically, Neotel’s parent company Tata Communications of India is now the largest partner in the consortium owning SAT-3/SAFE. But Hay points out that this gives Neotel little advantage in giving it a bigger say regarding the cable’s landing sites. “You can’t backdate rights. Tata has more in the consortium but it does not have more rights,” Hay says.
Consumers are not only gaining because there is finally competition on a sea cable that was under monopolistic control, but they will also gain from Neotel’s involvement in the development of a rival cable, Seacom. This will probably be laid in time for the 2010 soccer World Cup.
Neotel’s view on providing access to broadband is significantly different from other players. While other operators see broadband as a scarcity Hay says that unlike other resources that are being used up, bandwidth is a “permanently growing resource” and does not need to be used sparingly.
Bandwidth is not only growing, but its cost is also coming down, Hay says. “Every time a new cable is laid, it is significantly cheaper than the last one.”
Neotel is setting a new benchmark when it comes to managing broadband and this can be seen in how it has drawn up agreements when it comes to undersea cables. Neotel says Seacom’s prices will be made publicly available and that it is not an exclusive seller of bandwidth – there are no secrets in the deal.
Given the shortage in bandwidth, it is no wonder Hay says “we are happy to get involved in any cable that makes business sense”.
Having increased access to international bandwidth is not only good for the SA telecom sector but for the SA economy in general. Hay says a lot has been said about SA not being able to sell itself abroad because of the lack of bandwidth. The inability of global companies to get sufficient bandwidth is the real stumbling block, he says.
Large international companies like Google – which has spoken about putting up a server farm in SA – and Reuters – which has complained about the lack of bandwidth – will not invest in SA if there is not enough bandwidth to service their needs. “For global players to take us seriously they will have to have access to big pipes. Just giving them a plain old telephone is no longer viable,” Hay says.
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