Huge reduction in broadband costs expected with the laying of undersea cables

There is every chance for a reduction of about 10 to 20 percent in the broadband cost due to the introduction of new under sea cables in the next one and half years. The company ‘Seacom cable’ laid undersea cables in 2009, resulting an increase of 380% in South Africa’s undersea broadband capacity. More cables are going to be installed raising the capacity by a further 360%. The West Africa Cable System (Wacs), the submarine cable connecting the UK and South Africa, landed in the Western Cape in April, 2011 and is likely to come online within the next six months. The Africa Coast to Europe cable (Ace) will be between France and South Africa, and is expected to be completed by the end of the year. Incidentally the cable will be almost of the same size as the West Africa Cable System. The South Atlantic Express cable (SAex) connects Brazil with South Africa and Angola and will be ready by the middle f next year. Its capacity is 12,8Tbit/s, which is 10 times more than that of the Seacom cable and about 2.5 times the capacity of Wacs and Ace. Steve Song, analyst and founder of ‘Village Telco’ predicted substantial decrease in the cost, just as what happened with the introduction of cables by Seacom. The reduction in cost will stimulate domestic competition. But the absence of backhaul capacity necessary to transfer bandwidth within South Africa will reduce the effect of the new cables. So the issue must be first attended to on top priority basis. The introduction of Seacom and Wacs has provided ample capacity paving the way for substantial price reduction. But Alison Gillwald of ‘Research ICT Africa’ is not so confident. She is worried that there are limitations with respect to the following, which will offset the benefits of the undersea cables: 1. Unbundling of the local loop. 2. Increasing national backhaul to carry data through out South Africa 3. Access to spectrum to provide wireless services. The Seacom cable claims that after the launch of its undersea cable, there has been an increase of 700% in international bandwidth supply in South Africa. According to PricewaterhouseCooper’s outlook report for the year 2011 to 2015 for South Africa, Internet traffic increased by 100% in 2010. There is bound to be better service, higher speeds and lower internet costs. Internet access spending will rise from R12billion in 2010 to R35,7 billion in 2015. The landline subscriptions will also increase from 600,000 in 2010 to 2,85million in2015. There is no doubt at all that undersea cables will definitely provide better internet service at lower expenses.