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Johannesburg - Telecommunications operator Telkom has said undersea cable Seacom will drive competition in the SA broadband internet market and that prices "are coming down".
Telkom has neither confirmed nor denied rumours that it has purchased capacity on Seacom.
"From time to time Telkom buys capacity for redundancy purposes from various submarine capacity suppliers," said Alphonzo Samuels, Telkom executive for wholesale and marketing operations. "We view this as part of our normal business and, as such, do not make these agreements public."
Telkom SA MD Pinky Moholi said Seacom will stimulate competition in the industry. Telkom provides international bandwidth via the SAT3 cable, which is not operating at full capacity.
SAT3 is thought to be providing 50 Gbps of international bandwidth to South Africa at the moment, compared to 1.3 Tbps on Seacom.
"Obviously we would prefer that our customers stick with us and only use Seacom as a backup. We think our pricing is very competitive. We have been making moves with pricing on SAT3," she said.
"More capacity will come online from SAT3 in December, but also from cables on the west coast over the next two years."
According to Moholi, Telkom is heavily invested in other undersea cables that will arrive in SA over the next two years. She said Telkom is building a ring around South Africa that will be completed in 2011.
Angus MacRobert, CEO of service provider company Internet Solutions, said the cost of broadband is heavily affected by last mile connectivity, and that Telkom still has a stranglehold on that market.
"But we must also remember that Seacom doesn't have west coast failover," he said. "If Seacom goes down there is no backup. SAT3 has a restoration path up the east coast. Customers pay a premium for that; international bandwidth is only 25% of the cost of delivering bandwidth."
MacRobert said prices will gradually start to come down, but there will not be massive reductions before other undersea cables arrive.
- Fin24.com