The small town in KwaZulu-Natal that played a crucial role in South Africa’s broadband revolution

The picturesque coastal town of Mtunzini in KwaZulu-Natal is more than just a historic landmark — it’s where South Africa first entered a new era of broadband.

Sixteen years ago, the Seacom submarine cable made landfall in Mtunzini, breaking Telkom’s monopoly on international fibre connectivity and sparking a revolution in the country’s broadband market.

Before Seacom, there were two primary sources of international bandwidth in South Africa — the SAT-3/SAFE cable system and telecommunications satellites.

Telkom controlled access to SAT-3/SAFE, whereas satellites introduced significant latency to content hosted on overseas servers.

Regardless of which type of link Internet service providers used for international connectivity, bandwidth over them was expensive at the time — much more expensive than local data.

As a result, international bandwidth was sold at a premium in South Africa. Until 2009, paying R60 to R80 per gigabyte (GB) for ADSL data was the going rate.

Data that could only be used outside peak times was cheaper, and local-only data was even more affordable than that, costing around R70 for 10 GB.

That all changed when Seacom went live in July 2009, but getting there meant navigating a minefield of obstacles and political manoeuvring.

Construction on Seacom began in November 2007. However, the South African government created significant uncertainty regarding the local ownership requirements necessary for the cable to land.

In September of that year, the late former communications minister Ivy Matsepe-Casaburri announced that no undersea cable would be allowed to land in South Africa unless it was majority owned by local or African investors.

The announcement was heavily criticised, as most subsea cables were financed and operated by large consortia of telecommunications operators from around the world.

Considering the costs involved in deploying a submarine cable, it was unrealistic that all consortium cables that could land in South Africa must be majority local or African–owned.

Vested interests

At the time, it was assumed the South African government was attempting to protect Telkom’s monopoly for as long as possible, as Seacom was expected to heavily undercut its prices.

However, industry sources speaking on condition of anonymity have also told MyBroadband that vested interests were at play.

Politically-connected individuals were involved in a submarine cable backed by the AU’s New Partnership for Africa’s Development (NEPAD), and they wanted to make life as difficult for Seacom as possible.

Despite the political headwinds, Seacom made a plan to comply with the minister’s demands by entering into a commercial agreement with Neotel (now Liquid Intelligent Technologies).

Under the deal, Seacom would land in international waters and then sell the portion of cable linking to the Mtunzini landing station to Neotel and lease it back.

Seacom also inked deals to bring South African shareholders on board. These included Johann Rupert’s Venfin (25%), Cyril Ramaphosa’s Shanduka Group (12.5%), and Andile Ngcaba’s Convergence Partners (12.5%).

Seacom revolutionises broadband in South Africa

Within two months of Seacom landing in South Africa, Internet service provider Afrihost launched an ADSL product offering data for R29 per GB, immediately reducing international data prices by over 50%.

Afrihost CEO Gian Visser said at the time it would not have been possible for them to undercut the prevailing prices as an upstart ISP had it not been for Seacom.

Six months later, Mweb one-upped them, launching an affordable consumer uncapped ADSL service from R219 per month (excluding Telkom’s monthly line rental and access fees).

The late former Mweb CEO Rudi Jansen said Seacom’s arrival was a critical factor in allowing them to launch uncapped ADSL.

“The biggest hurdle was for Mweb to build our own national and international network in a short time frame, which was previously outsourced almost entirely to Telkom and Internet Solutions,” Jansen told MyBroadband in a 2018 interview.

“We went from no network to one of the biggest networks in a space of 4 months.” From there, Jansen said they had to secure affordable international bandwidth for their network.

“This was made easy with Seacom being a fantastic partner. They could see the opportunity to sell lots of bandwidth early on, and they helped us with some innovative solutions,” he said.

Seacom’s arrival in South Africa broke Telkom’s stranglehold on subsea fibre capacity and opened the floodgates for affordable, uncapped broadband products to launch.