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Submarine cable 'key to e-commerce growth`

By Iain Scott, ITWeb group consulting editor
Johannesburg, 19 Aug 2005

Freeing up access to the submarine fibre-optic cable around Africa would provide e-commerce and Internet banking with the accelerator they need for more widespread adoption in SA, says World Wide Worx MD Arthur Goldstuck.

Goldstuck said at the Terrapinn Banking Technology Africa 2005 conference in Sandton this week that there were 3.5 million people in SA with Internet access at the end of 2004, 1.8 million of whom had five years` experience.

Although there were 1.4 million online bank accounts, these were held by an estimated one million clients. But of these, half only accessed statements, which meant that 500 000 people conducted transactions.

"If you wait long enough, the number of Internet banking users will reach the number of Internet users, because the Internet growth curve is flattening," he commented, but added that he believed an accelerator was needed for e-commerce to take off.

Goldstuck said most of SA`s leading online retailers cited lack of sufficiently fast and affordable bandwidth as the one major obstacle to growth of e-commerce.

If this applied to growth in e-tailing, it applied even more to growth in online marketing and collaboration in general, he added.

The potential accelerator, he said, was the SAT3/WASC/SAFE submarine cable.

Launched in May 2002, the cable links 25 African countries and links directly to Europe and Asia. Links in Portugal and Malaysia extend to the rest of the world.

The 14 350km SAT-3/WASC cable (southern Africa-Western Africa) has a system capacity of 120GBps ultimately, allowing for 5.8 million simultaneous phone calls. The 13 500km SAFE cable (SA-Far East) has an ultimate capacity of 130GBps, allowing for 6.3 million simultaneous phone calls.

Goldstuck said Telkom promised that the cable would bring fast, efficient and affordable communications, but affordability had not yet become a reality.

He pointed out that Telkom`s $85 million investment in the cable took place before the company was privatised, which means that taxpayers in effect paid for the cable.

"Telkom has taken it away from the South African consumer, but it will have to give it back," he said. "The minister of communications, the director-general and ICASA [the regulator] have demonstrated a new muscularity in moving towards a competitive telecoms landscape that benefits all South Africans.

"Telkom will protest every step of the way, but it too will benefit," he added. When connectivity improved, there would be a "massive take-up of e-commerce and Internet banking".

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