“SEACOM cable WILL drive down prices,” says provider

According to one of the country’s largest cellular service providers, the launch of the SEACOM international undersea cable will be good news for consumers and businesses because it will, over time, help to drive down international bandwidth costs for Internet users ‚ despite scepticism in the market. They also confirm that Telkom is due to upgrade its SAT3-SAFE cable to triple its current capacity.

The launch of the new SEACOM undersea cable yesterday (23 July), will be good news for consumers and businesses because it will, over time, help to drive down international bandwidth costs for Internet users, according to South Africa’s largest independent cellular service provider.

That’s the word from Tim Walter, general manager: Product and Marketing at Nashua Mobile. He says that although expectations of massive, overnight price drops are unrealistic, the new cable will introduce real competition to this part of the telecommunications market and help to gradually bring prices down while driving data usage caps up.Nashua Mobile, a subsidiary of the JSE-listed Reunert group, is an independent telecommunications solutions provider with a range of offerings from broadband, Internet service provision and mobile data through to messaging and cellular voice solutions. The company is one of South Africa’s largest independent cellular solutions providers and one of the few providers to offer customers the choice of all three networks (Vodacom, MTN and Cell C).

Says Walter: “Until now, most of the country’s international bandwidth through the SAT-3/SAFE cables has been controlled by the incumbent operator and slow satellite connectivity was the only real alternative. Now, other networks and service providers have an alternate source for international bandwidth.””

Walter says that the introduction of SEACOM should result in some price drops for broadband Internet users, although they should bear in mind that international bandwidth accounts for only part of the expense of an Internet connection.

In addition, for reasons of redundancy and capacity, service providers will need to use SAT-3/SAFE in addition to SEACOM, meaning that the owners of the older cables will still have a great deal of market power.

“”These factors will preclude sudden and sharp drops in broadband prices,”” Walter says.

However, broadband users can expect to see their data caps grow rapidly in the months and years to come as international bandwidth becomes cheaper and more abundant. That will mean that they will be able to do far more with their Internet connections – including video streaming and big media downloads – at a far more affordable cost, says Walter.

Telkom, for example, recently lifted caps on 2 Gb broadband packages to 3 Gb and 3 Gb caps to 5 Gb. Caps of 10GB, 20GB, 30GB or more could become affordable to average broadband users within a matter of two to three years.

SEACOM’s arrival marks only the beginnings of a more competitive market for international bandwidth in South Africa, notes Walter. A host of additional cables, including the West Africa Cable System (WACS) and the Eastern Africa Submarine Cable System (EASSy), will add bring even more international bandwidth to the country over the next two years.

In addition, according to Nashua Mobile, Telkom plans to nearly treble the capacity of the SAT-3 submarine cable system that connects next month. The operator will upgrade SAT-3 from 120Gbit/s to 340Gbit/s and has said that it expects dramatic falls in the cost of international bandwidth over the next few years.

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