Greater competition is needed in the roll-out of undersea cables for broadband prices to come down.
Edwin Thompson, MTN general manager of infrastructure and technology, points to the two fibre optic undersea cables currently bringing high-capacity broadband into SA, namely Seacom, which delivers 1.28Tbps, and Telkom's West Coast SAT3 cable.
“In terms of undersea cables, we need more competition than we have now with two cables. The two cables will simply settle at a price which is likely to still be higher than it needs to be.
“The next problem is that the local infrastructure is still quite expensive and also further impacted by relatively high cross-connect fees at the Johannesburg landing point,” adds Thompson.
He will discuss these topics further at the ITWeb Broadband conference taking place on 8 and 9 October at the Indaba Hotel in Fourways. Thompson will provide an overview of what Africa's telecommunications landscape will look like once all the undersea cables are fully established and regulation relaxed, as well as what pricing structures will be.
Bands and cents
On whether the country will see a significant price drop, Thompson says, in the short-term, the public will get more band for their rand rather than considerable price cuts.
“We have already seen the likes of MTN Business offering more capacity at the same price; this is in effect based on a 'cost per Mbps' decrease in cost. All research is showing that SA purchases capacity based on what one can afford, thus the expectation is users will simply get more for the same money.”
Thompson believes Seacom acts as a broadband alternative, which has put some pressure on prices as well as redundancy opportunities.
“Networks will slowly no longer have sole dependence on a single undersea cable system. Once Eassy comes in next year, this will put quite a bit of pressure on pricing, and is likely to spark some downward movement in capacity costs.
“The West Coast Cable, coming in around 2011, is a very large cable and likely to spark further significant capacity additions,” he adds.
“The most significant thing about most of the new cables is that they are coupled with plans to get to many countries which have not had access to cable systems and have been reliant on high latency satellite infrastructure. These cable systems will bring opportunity for first world latency sensitive applications to become a reality for Africa too,” concludes Thompson.
Share