Just the threat of landing a 15 000km fibre optic undersea cable on South Africa\u2019s shores has forced down broadband prices 90%, according to Seacom\u2019s president Brian Herlihy.<\/p>\n
He says that when Seacom announced its intention to launch the %600-million undersea cable project, operators in South Africa were pricing broadband at R8 000 per megabit per month and that prices have now dropped as low as R800 per megabit per month.\u00a0 \u201cWe have created competition before we even landed the cable,\u201d said Herlihy.<\/p>\n
But Seacom plans to halve these prices again when it enters the market in June 2009 with a price of R435 per megabit per month.<\/p>\n
The Seacom cable is well into its production stage \u2013 just this week it broke ground in Maputo for the Mozambique landing station, which follows similar developments in Mombassa, Kenya.<\/p>\n
Herlihy says the project is set to begin construction of the South African landing station in Mtunzini and the Tanzanian landing station in Dar es Salaam by net month.<\/p>\n
The Seacom project will be the first undersea cable to connect to East Africa to the rest of the world through links to India, England and France.\u00a0 Besides South Africa, Mozambique, Kenya and Tanzania, the Seacom cable will also link to Madagascar, Ethopia and Egypt.<\/p>\n
The project is 76,25% African-owned, with South Africa\u2019s Shanduka Group (12,5%), Venfin Limited (25%), Convergence Partners (12,5%) and Kenya\u2019s Industrial Promotion Services (26,25%) all on board.\u00a0 The remaining 23,75% is owned by Herakles Telecom, a New-York-based international development group.<\/p>\n
\u201cWith only eight months to go before the system is ready for service, Seacom remains set to become the first cable to connect East and Southern Africa to the rest of the world with plentiful and inexpensive bandwidth,\u201d says Herlihy.<\/p>\n
He says a simple calculation shows that South Africa needs about 50 gigabits of international capacity to service the one million broadband subscribers in the country, but only has 10 gigabits.<\/p>\n
\u201cInternational capacity has been choking the data market in Africa for years now,\u201d says Herlihy.<\/p>\n
Initially Seacom will deliver 80 gigabits of international capacity through its cable but can meet more demand easily because the cable has a potential capacity of 1,28 terabits (1 280 gigabits).\u00a0 Herlihy says Seacom managed to sell two-thirds of the initial capacity of 80 gigabits.\u00a0 He says that the Seacom cable could become strategically important going forward, as trade between Africa and Asian giants such as India and China increases.<\/p>\n
At present 95% of all African traffic is directed to Europe and North America, but analysts predict that in five years 25% to 35% of all African traffic will be directed to Asia and that in 10 years this figure could be as high as 45%.\u00a0 Nearly 90% of the Seacom cable has been manufactured and the first load of assembled cable and repeaters has been loaded on a Tyco Telecommunications ship so that installation can begin shortly.\u00a0 The second ship will reach Africa in early 2009.<\/p>\n
The landing station modules, which take the form of containers, have already landed in Mozambique and Kenya and the two landing stations for South Africa and Tanzania are being shipped.\u00a0\u00a0 In South Africa Seacom has had to partner with Neotel for the landing station, as only Neotel, Telkom or Sentech are licenced to put down undersea cables.<\/p>\n
Herlihy says because of South African politics, Seacom had to work with a partner such as Neotel to land the cable, unlike in Tanzania and Kenya where it has set up licensed local subsidiaries.\u00a0 He says that although Neotel partnered Seacom to land the cable, the international capacity will be sold using an open-access model so that any operators can buy capacity from Seacom.<\/p>\n