This is an interesting move by SEACOM, and I'd like to explore it for a second.
<disclaimer>I have to state very clearly at this point that what I'm about to say are my own opinions and are NOT in any way representative of the views of TENET or any other organization or person that I am associated with. </disclaimer>
Firstly, running a layer 2/3 network vs running a layer 1 network is a vastly more complicated operation. I'd be curious to know who is actually doing the management of this network and what the support is like behind it.
Secondly, if you consider that in the UK, you can buy transit capacity at a whole sale level (and here I'm referring to real transit, not oversubscribed consumer grade stuff) at sub 2 euros a megabit if you buy cheap and 4 euros a megabit if you want a true tier-1 provider, it remains to be seen what value there is in actually taking the IP transit from SEACOM in South Africa. To make it worthwhile, the price would need to be almost identical to what they currently sell at a layer 1 level or cheaper.
In the case of it being cheaper, it means they are directly competing against their own customers to whom they have sold Layer 1 circuits, and thats a road to nowhere, and potentially even a competitions case (someone correct me if I'm wrong, but this is an issue that Telkom/SAIX ran into at one point).
It also needs to be pointed out that if SEACOM is planning on offering their services via an MPLS network, where you buy a point to point link that is provisioned over AToM the customer buying it will have to very very carefully consider what they will need with that link in the future, because while its possible to do, running AToM over AToM or provisioning MPLS over another providers MPLS network can become... problematic to say the least.
I also question their content delivery strategies, as most of the major CDN's prefer to peer everything and make their money from their content customers rather than the distribution of data. Hence, unless SEACOM is planning on getting into the actual CDN game, it will be curious to see how this pans out.
Even if they are planning on becoming an ISP and delivering other peoples content, again, I'm curious to know what content they will have that will differentiate themselves. I mean, lets look at the major content delivery systems for half a second.
A.) Akamai - Currently represented in the market with some of the big players
B.) Limelight - Currently "semi" represented in the market by one particular company who unfortunately has decided to charge vast sums of money for the content, however, I'm far from convinced that there aren't exclusivity clauses which will stop further Limelight systems being deployed for a while
C.) Google / Youtube - It's common knowledge that various clusters/delivery mechanisms already exist for this content within South Africa
D.) Sourceforge - Already in the country
E.) Cacheboy CDN (one of the smaller ones) - Already in the country
So what is this new content and where will it be coming from? Is the plan to make money off the distribution of the content paid by the content providers or off the consumer buying the content? If it's the latter, as a particular provider was told recently, its better to go back to Layer 1 circuits, land them in London and pay the dirt cheap fees to get to LINX where you can peer with almost every content network in existence on a settlement free basis.
Bottom line -
Do I believe that this thing as the potential to take off and be a success. Yes, definitely.
Do I believe that there is space in the market right now in SOUTH AFRICA for this? Again, yes, so long as you are willing to undercut your own long term customers who have invested heavily with you, and potentially cut your own throat. If not, I don't see the value proposition.
Do I believe this has the potential to work in the rest of Africa - Thats a whole other story, and there the answer is a very emphatic yes - Where the levels of content are far lower and the markets far less mature than here, they have the chance to do rather well.
Anyway, those are my thoughts, and again, I need to state
IN NO WAY DOES THE ABOVE REPRESENT THE VIEWS OF TENET OR ANYONE ELSE TO WHOM I AM ASSOCIATED WITH, THE ABOVE VIEWS ARE PURELY REPRESENTATIVE OF MY OWN CURRENT THINKING ON THE MATTER
