Cheap bandwidth at last
The competition should have the effect of slashing international bandwidth prices which, until now, have been kept artificially high by Telkom. The company runs the only two cable systems linking SA with global networks.
Now, SA and international investors and governments are lining up to pour billions of rand into new submarine cable projects, mostly along Africa’s east coast.
* One of the newest is South East Africa Telecoms (Seat). Details are still sketchy but one source tells the FM that Seat enjoys the financial backing of giant US private equity firm Blackstone. A Blackstone spokesman denies that the group is involved, though.
The FM has established that representatives of Seat have been in talks with local operators. SA businessman John Mathwasa is understood to be involved with Seat, but did not provide details when contacted.
* A US$1,5bn expansion of Flag, the world’s largest private undersea cable system, owned by Indian telecom operator Reliance Communications, is planned. Reliance will build four new cables – in Asia, the Mediterranean, the Pacific and Africa. Reliance’s Africa cable will also run along the continent’s east coast.
* Construction of another cable, the East Africa Submarine System (Eassy), which has been on the cards for several years, is expected to begin soon. Eassy has been delayed several times because of disagreements between member countries and potential investors, but most concerns have apparently been addressed.
* The department of public enterprises also has designs on a cable system. Public enterprises minister Alec Erwin wants to use a new state-owned vehicle, known as InfraCo, to build a submarine cable to link SA with other international cables in the British Virgin Islands.
InfraCo has been capitalised with R647m.
The idea is to provide wholesale international bandwidth to telecom operators and Internet service providers, as well as to the proposed Square Kilometre Array (SKA) radio telescope project, for which SA and Australia are bidding.
Industry executives have expressed concerns about Erwin’s plans, saying government has no experience in operating a telecom cable and could undermine the investment case for other cable systems.
Telkom says it is concerned about the number of proposed cable systems along Africa’s east coast. "The deployment of two or more cables within the same region will affect the commercial viability of all of them," it says.
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