Off the coast of Africa, a transformation in the telecommunications industry is beginning to take shape.
The South African majority owned Seacom cable, an optical fibre submarine communications cable, due to be competed come June this year, will link South Africa with Eastern Africa, India and Europe, marking the start of a new era in the continent's communication capabilities.
In early February, Seacom announced that it had begun laying cable off the coast of South Africa, which will ultimately be part of a 15,000 km cable network with landing points at terrestrial cable stations across the three continents. Equipment for each country's landing station (where the sea cable meets the land), will be delivered come April, ready to come online for the June deadline. South Africa's second fixed-line operator, Neotel, will be operating South Africa's landing station in Mtunzini. The cable will run up Africa's east coast, thereafter splitting east to India and west through the Red Sea to Egypt, and onward to the Mediterranean and Europe.
For years South Africa's lack of undersea fibre optic cable has limited the continent's capacity to connect with the rest of the world. The $650m Seacom project will effectively change all this, with the higher bandwidth capacity finally accommodating the country's rising Internet demand, as well as enabling high-definition television (HDTV) , peer-to-peer networks and Internet Protocol Television (IPTV).
Running at 1.28 terabits per second, the new cable will enable a tenfold increase in capacity compared to the current SAT-3 cable network, which runs along Africa's west coast from South Africa to Europe. Ultimately, the increased capacity of the cable compared to the existing infrastructure will enable greater and wider availability for lower costs.
Currently, the single SAT-3 undersea cable from Europe is the only international broadband link to South Africa, where state-owned provider Telkom - a part owner of the cable - has exclusivity. This has generated not only a bottleneck, but Telkom has been accused of charging users exorbitant prices for access. According to a survey by Russell Southwood, the publisher of African ICT newsletter BalancingAct, Telkom charges more for access than other African countries using the SAT-3.
The improvement of connectivity in South Africa will go a long way toward expanding the communications options available to the country's growing economy. South Africa is already the continent's leader in regards to call centres and business process outsourcing, but the new bandwidth capacity will enable these businesses to become more relevant within the marketplace.
The 2010 FIFA World Cup games are also set to benefit, as the new cable will meet international bandwidth requirements for broadcasting the summer matches in HDTV around the world.
The new opportunities afforded by Seacom coincide with the timely opening up, albeit slowly, of the telecom market by the Independent Communication Authority of South Africa (ICASA), as Telkom's long-standing fixed-line monopoly effectively draws to a close. Already, ICASA has granted up to 400 operating licences, giving African businesses and individual consumers unprecedented choice in choosing their service providers.
"Historically, all businesses were subjected to a take-it-or-leave-it attitude from Telkom in terms of their broadband requirements. Now there will be new suppliers who will be able to customise their services at a lower cost to the needs of South African companies", Arthur Goldstuck, managing director of technology research firm World Wide Worx, told the local press last month.
It should be noted, however, that only a handful of licensed companies are currently operational, as the start-up costs for actually running a network are exorbitant. Consequently, the sector does expect to see renewed consolidation in the future, since many new entrants simply do not have the deep pockets to avoid mergers.
All this bodes well for the ICT sector. The World Economic Forum's 2008-2009 Global Competitiveness Report ranks South Africa 49th out of an evaluated 134 countries in terms of technological readiness. According to the report, the country has a competitive advantage in regards to availability of the latest technologies - coming in 37th overall. But it has a long way to go to improve its low rate of internet users, personal computers and broadband internet subscribers, as in those categories South Africa ranked 95th, 68th and 77th, respectively.
Despite significant challenges, the country's IT sector is taking steps to finally answer the market's call for cheaper rates, wider options and better service. As the economic powerhouse of the continent, the advancement of the Seacom project indicates South Africa is moving in the right direction.
