WACS to increase competition

The West African Cable System (WACS) will be operated on a policy of open access and this will increase competition in the market, says an analyst.

The cable landed in SA yesterday, at the country's third international fibre gateway, in Yzerfontein. It will link Southern Africa and Europe, and has a capacity of 5.12Tbps, making it Africa's largest-capacity cable.

It is being funded by a consortium that is composed of 12 parties. Angola Cables, Broadband Infraco, Cable & Wireless, Congo Telecom, MTN, Office Congolais des Postes et T'el'ecommunications, Portugal Telecom/Cabo Verde Telecom, Tata Communications/Neotel, Telecom Namibia, Telkom SA, Togo Telecom and Vodacom, are the investing parties.

Angus Hay, GM of strategic business development at Neotel, says the consortium is running the cable on a policy of open access.

This means there's no right of refusal, creating fair play, according to Johan Meyer, executive for global capacity at Telkom.

He adds that the policy means there are no barriers. “Operators have collocation facilities at the cable station and there are no blockages.”

WWW Strategy MD Steven Ambrose says open access here means that anyone who wants to connect to WACS can do so, unlike the SAT-3 cable, which is owned and managed by Telkom. “So if someone wants to connect to SAT-3, they have to go through Telkom.”

He adds that this policy will increase competition because, although WACS is unlikely to be as open as Seacom, anyone can purchase capacity on the cable and operate it independently.

“It will provide redundancy. So Seacom is down at the moment and MWeb could get capacity from WACS. It's good news for SA.”

Ambrose also says WACS and the increased competition it will bring to the market will see broadband prices drop. “Not right now, but in the future prices will drop.”

e high-speed global telecommunications network, partners say there will be no cost decrease yet.

Meyer says prices won't be reduced greatly, but users will get more capacity for their money with WACS.

“We may not see a massive impact immediately in terms of prices, but the unit cost is reducing even though the capital costs may be up. Price drops will depend on project managers.”

Kobus Stoeder, head of Global Capacity, Wholesale Services at Vodacom Business, says the reason the new system will not lead to a big drop in broadband prices yet is because new infrastructure had to be put in and this must be paid for first.

“The African continent still yearns for affordable higher speed connectivity. Meeting the needs for increased capacity along the cable route, this network will enable the landing countries to be served by a system offering significant capacity and lowering the cost of broadband,” says Andrew Shaw, interim CEO of Broadband Infraco.

“If you want to remain relevant as an operator, you have to be in on this cable. However, WACS, on its own, is not sufficient. If there is one cable carrying 80% of a country's capacity, and it goes down, the country suffers. So one cable is just not enough,” says Meyer.

He adds that although SAT-3 and SAFE are smaller than WACS in capacity, due to their equipage they will see larger traffic than WACS at first, but WACS will catch up quickly.

Meyer also says infrastructure must be put in place for WACS to be able to increase penetration. “WACS by itself cannot increase broadband penetration. The question is how companies are going to take the capacity from WACS and get it to the people who need to use it.”

MTN SA MD Karel Pienaar says the commercialisation of WACS and other submarine cables will set the stage for a mobile revolution. “Africa has, until now, been a cyclist on the information superhighway.”

Manufactured and installed by Alcatel-Lucent Submarine Cable Networks ASN, the four-fibre pair system has been under construction since 2009. The total project cost will not exceed $650 million.

In addition to complementing existing high-bandwidth cable systems in the region, WACS will provide much needed diversity for large-volume broadband traffic from SA to Europe, says the consortium.

“The 14 000km fibre-optic submarine cable system will effectively raise SA's current broadband capacity by over 500Gbps.”

The cable will operate at 40Gbps and will connect SA to the UK, with landings in Namibia, Angola, the Democratic Republic of Congo, the Republic of Congo, Cameroon, Nigeria, Togo, Ghana, C^ote d'Ivoire, Cape Verde, the Canary Islands, and Portugal.