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'International capacity is cheaper'

Alphonzo Samuels: Telkom prefers to invest in consortium cables.

Investment in undersea cables has dramatically decreased the cost per gigabit of international capacity coming into SA, says Telkom.

“In essence, statistical trends clearly show that, while capital investment and overall cable capacity have been significantly enhanced over the recent years, the costs per gig capacity over the concomitant period have drastically dropped,” says Alphonzo Samuels, Telkom's managing executive for wholesale services.

The company says Telkom's own cable system, SAT-3/WACS/SAFE, has seen a price decrease of 90% since 2002. While the company has not indicated actual costs, prices are coming down because of upgrades to technology and increased investment in the other cables.

Samuels says Telkom's undersea capacity has just been upgraded, specifically for the 2010 Fifa World Cup. “For example, by the end of 2009, the SAT-3 and SAFE upgrades to at least three times their current capacity will be concluded,” he says.

By the end of this year, SAT-3 will be upgraded to 340Gbps and SAFE will be upgraded to 440Gbps.

There will be at least nine undersea cables connecting Sub-Saharan Africa to the rest of the world, by the end of 2011.

Samuels says SAT-3 provided the shortest route to Europe, while SAFE was the shortest link to Asia. “Furthermore, S3WS not only offers fully diverse solutions out of SA, but also has adequate spare capacity to fully cater for 2010. From an undersea capacity perspective, therefore, it's all systems go for the World Cup next year,” emphasised Samuels.

More capacity

Telkom has an aggressive strategy for investment into other cables, explains Samuels.

The company has invested in several consortium cables expected to hit South African shores between now and 2011.

He says Telkom's investments included COLUMBUS3, SEA-ME-WE3 (South East Asia-Middle East-Western Europe), SAT3/WASC/SAFE (South Atlantic Telecommunications/West Africa Submarine Cable/SA Far East), Eassy (East Africa Submarine Cable System), EIG (Europe India Gateway) and WACS (West Africa Cable System).

“We prefer to invest in consortium cables as consortiums comprise global operators with financial strength, operating experience, significant customer bases and market share, as well as diverse revenue streams,” Samuels explains.

New product

Alongside the company's investments and upgrades, Telkom has also released a wholesale package.

“Telkom offerings, to date, have only been premium packages but, as from today [12 October], a new IPLC product called City to City has been launched by Telkom,” says Samuels.

The new service offering is a full circuit from Telkom's Barrack Street or New Doornfontein exchanges via Melkbosstrand to Telehouse East or Telecity 1, in London. City-to-city bandwidth options will initially comprise an STM-1 offering that is route-specific. Access to the customer premises from the Telkom point-of-presence is excluded and no restoration or redundancies are included.

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