International capacity costs to plummet

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 27 Nov 2008

International bandwidth costs from the incumbent could drop from R7 000 per Mbps to less than R1 000 per Mbps.

Vodacom says it has reviewed the international costs of bandwidth and has seen, over the last seven years, a drop in costs by a factor of eight.

“It will not take seven years for costs to drop again by a factor of eight, it will most likely happen over the next 12 to 18 months,” added executive director of Vodacom Business Wally Beelders, speaking at the 2008 MyBroadband Conference this morning.

Beelders said the undersea cables and an increasingly competitive telecoms market will drive the costs down. “When international capacity costs come down low enough to be cheaper than local capacity, say for example between Cape Town and Johannesburg, the operators will start feeling the pressure to bring down consumer bandwidth costs.”

Vodacom believes the drop in costs will drive local businesses to take advantage of hosted environments. “The cheaper costs will drive people to architect networks differently and will drive business intelligence from the edge and closer to the hosting environment.”

The company recently completed its own R100 million data centre that is expected to host up to 20 000 client servers and 650 000 virtual machines. “We looked at several data centres around the world and designed our facility to reflect the best in class,” explained Beelders.

The facility is classified as a tier four data centre, meaning it's designed to host mission-critical computer systems. The management system uses Netbotz and Scada BMS technologies. Bandwidth features 10Gb copper, 10Gb multimode optic fibre and 10Gb single mode fibre.

Vodacom Business's data centre is located in Johannesburg and offers Web hosting, server co-location, managed storage and backup systems.

Beelders said, for Vodacom Business, the understanding of how lowered costs will push business into hosting, will be a key differentiator for the future of the telecoms giant.