Eassy does it

SA's broadband market is in for a shake-up with the arrival of the East African Cable Submarine System (Eassy), which brings with it industry competition and customer choice, say industry insiders.

The 10 000km undersea cable will deliver broadband capacity of up to 3.84Tbps and will connect SA with eight other African countries, offering transit connectivity through backhaul networks into at least 12 landlocked countries.

Eassy is SA's third undersea cable offering international broadband and is set to incite a possible price war among competitors, Neotel's Seacom and Telkom's SAT-3 cable.

“I suspect that the spate of price reductions - or in most cases rather capacity increases - on the international component of bandwidth in recent months are a sign that the anticipation of the Eassy cable's switch-on has already been factored in by the major players,” notes director of research at BMI-TechKnowledge Brian Neilson.

“We will see more price and performance improvements, but perhaps not at the same dramatic pace as in the past year,” he adds.

However, World Wide Worx MD Arthur Goldstuck believes the impact of Eassy on the market will not be felt immediately, but he points to the opportunity Eassy presents to the mobile broadband market.

Mobile operators Vodacom and MTN are top investors in Eassy, offering the operators access for the first time to their own international broadband network.

Goldstuck argues that 3G connectivity is the fastest growing form of connectivity in the country, but the cost of using this form of connectivity is still too high.

With the arrival of Eassy, Vodacom and MTN will have the opportunity to get creative with the pricing of their mobile broadband offerings and the market will expect it, he points out.

But Goldstuck notes that the cost lies not so much in international bandwidth itself, but rather in the cost of moving data around the network.

He argues that Cell C's new network roll-out is likely to have more of an impact on the cost of mobile broadband than Eassy.

Regardless, Goldstuck and Neilson agree Eassy will have the biggest impact on consumers.

Eassy cable management committee chairman Trevor Martins previously stated Eassy would promote a shift in the underlying cost structure in SA's international broadband market.

He noted that its entry into the market would inevitably drive down wholesale costs, but the carry-through to the retail market would depend on the various players.

However, Goldstuck maintains that third alternative to international broadband will put the power of negotiation in the hands of the consumer.

He explains that companies will now be in a position to negotiate the pricing and structure of broadband packages, which in turn will force providers to be more flexible in their offerings.

Neilson points to the benefits of increased redundancy. “There is also the added level of redundancy, even though the major players already had access to both Seacom and SAT-3/SAFE, there is the possibility that Eassy brings more options for the larger players to blend bandwidth without having to charge consumers a premium for this added quality of service,” he concludes.