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The Evolution of Broadband in South Africa

By Bobby Buys

Republish: EasyPublish™ Published: 19Nov2009 Word count: 412 Viewed: 34 time(s) Get Free Content For Your Site

Internet access in South Africa has been expensive and characterised by slow satellite connections. All this promised to change with the entry of Seacom, the company that dared to lay an undersea fibre-optic telecommunications cable with the aim of bringing Africans their best broadband experience ever!

Now, months into the installation of Seacom's 128 terabytes per second (Tbps) link, has broadband really evolved in South Africa?

Following the installation of Seacom in South Africa, Telkom, which enjoys a monopoly in terms of bandwidth possession, dropped its prices by 50 percent. Seacom itself, which acts as a wholesaler of its broadband services, has sold 34.21 Gbps of its total capacity to date.

Yet, the benefits have not yet touched the end consumer. Why?

While Seacom has done its part by bringing the connectivity, it is left to benefiting countries' governments and the ISPs who will ultimately pass on the returns to end consumers. According to Arthur Goldstuck, MD of technology research company World Wide Worx, "The Seacom cable still needs to be extended inland with a terrestrial fibre-optic network before the real benefits kick in." There is a lot of infrastructure firming up to be done first, including deregulation efforts.

Secondly, ISPs who have bought from Seacom are "tied-up" with existing bandwidth contracts, which need to be completed before they themselves can benefit from the Seacom link. ISPs' operational costs will also delay price reductions.

Thirdly, as Arthur Goldstuck opines, with 6 more underwater cables by 2011, the promise of unprecedented speed and lower bandwidth costs will finally materialise.

In conclusion, Seacom has paved the way by connecting Africa to the rest of the world promising a host of economic and business benefits.

World Wide Worx predicts that South Africa's online population will touch the 9 million mark in the next 5 years as a result of better, cheaper broadband access.

Before that happens, internal infrastructure will be built up, and competition-induced price wars between ISPs will be played out to result in a truly exceptional broadband experience. With the cost of broadband access expected to become more affordable, running a business on the internet in South Africa is looking increasingly promising. Economists expect a 30 percent increase in local e-commerce sale and say that South Africa has yet to experience the real boom in e-commerce. The country has a lot of room for growth: while about 10 percent of retail sales in the US are done online, in South Africa such sales make up only about 0.5 percent of sales.

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