Africa's predicted bandwidth glut hasn't quite arrived yet.
BY Lesley Stones , 7 July 20110 comments 
photo: Suzanne GellRaj Wanniappa, Internet Solutions
Remember the days when Africa was starved of bandwidth? Of course you do, because it still is.
Yet with all the underwater and overhead activities in the telecoms industry, you could be forgiven for thinking Africa must be pulsating with all the high-capacity bandwidth it could ever need.
The latest connectivity comes from above with the New Dawn satellite, and from below with the Western African Cable System (Wacs). New Dawn is an Intelsat project backed by South African investors Convergence Partners, designed specifically to supply fresh capacity for Africa.
We asked some local bandwidth-hungry businesses what impact they expect to see. As usual with bandwidth promises, it’s great news in theory but probably less spectacular in practice.
Costs may not fall much because the bottleneck to delivering that international bandwidth to homes and businesses lies in less robust terrestrial networks.
“The arrival of the Wacs cable as well as the Intelsat satellite is welcome at a time when businesses and consumers require reduced costs of connectivity,” says Farren Roper, head of Product and Markets for FNB Connect. “It is anticipated that costs will reduce because of supply and demand considerations.”
The bank is always seeking cost savings, both for itself and for its customers, Roper says. It also uses multiple service providers for reliability and backup. So far, however, FNB hasn’t committed to buying bandwidth from either new supplier.
“It would depend on a number of things, including market price, pricing models, contractual terms as well as, most importantly, stability,” Roper says. “Being efficiency-driven, we consider all options when evaluating undersea cables and service providers.”
FNB chews through massive bandwidth, especially while a recent publicity campaign saw it offer its ADSL customers free access to bandwidth-chomping YouTube. From May until July 1, customers of FNB Connect Surf could browse the world’s most popular video site for free.
“Broadband access is reaching more consumers, and multimedia and social media are becoming more widespread and popular. We are enabling our customers to be part of this by giving them free access to YouTube,” Roper says.
You can’t imagine the Johannesburg Stock Exchange encouraging its staff to play around on YouTube, but the JSE certainly appreciates the need for high bandwidth to handle millions of crucial share trades.
CIO Riaan van Wamelen says the increasing range of alternative connectivity delivered by new systems such as Wacs and New Dawn are exciting as they are finally positioning Africa to catch up with the rest of the world, both in terms of costs and choice.
Connectivity is critical to the JSE, and the cost of bandwidth has a significant impact on its business and on the business of its clients. “The new cable systems are specifically relevant to the JSE in terms of expanding international access to the exchange. Low-cost, quality connectivity is also a vital element of expanding our reach into Africa,” Van Wamelen says.
“However, and specifically in relation to the cable systems such as Wacs, we should not expect the full benefits to be realised in the near term. In-country bandwidth is still problematic and while massive investments are being made in fibre infrastructure, it will take a number of years to bring South Africa on a par with developed nations.”
The JSE hasn’t made any commitment to Wacs or New Dawn. Says Van Wamelen: “We have evolving connectivity needs and will buy connectivity services from the providers as and when required. We will not directly buy capacity on the cable system, but it’s likely this will be bundled in existing and future service offerings we get from our telecommunications providers.”
The 14 500km cable linking Africa to England is the first to touch the Democratic Republic of Congo, Togo and Namibia, which will probably experience a far more dramatic benefit than better-served South Africa.
For a really technical reply, of course, ask the guys at Internet Solutions (IS).
“The biggest challenge to lowering price and getting better service still remains reliable last mile services,” says Raj Wanniappa, IS’ executive of Carrier Services.
The overall cost of telecommunications is a combination of international connectivity from players such as Seacom and Wacs, long-distance backhaul to carry data from coastal landing sites to the major hubs, and the last mile link from operators such as Telkom, Neotel and IS. Alternative options for any of those theoretically increases competition and should reduce costs, Wanniappa says. Often, however, organisations use the new suppliers only as a back-up for their existing services, so prices tend to remain flat or decline nominally, although capacity and service levels improve.
New Dawn will probably have its biggest impact in emerging African countries, where there is an increasing demand for satellite services to reach remote locations where terrestrial services are still not available, he predicts.
More excited than other CIOs is Johan Fourie, the Chief Technology Officer of Media24.
“This is really going to benefit online content providers,” he says. “The content is going to be so much richer. Up until now, in South Africa, it’s been flat text.
This is going to open up interactive, rich live content. The business plans of our publishers are really looking different this year because the bandwidth restrictions are going. There are some interesting things in the pipeline.”
Media24 buys much of its bandwidth from Telkom, but is increasingly buying from MWeb, a sister company in the Naspers stable. MWeb will probably buy wholesale capacity from the new suppliers, Fourie says, and resell that to Media24 at an affordable fee.
“It’s a big step in the right direction. It will open up a world of internet to South Africa. If you have bandwidth available you can stream across the world and get rich content and video and live shows.”
American media companies stream live sports matches to the desktop, but that’s not feasible in South Africa because of bandwidth restrictions, Fourie says. Yet it’s beginning to happen, since DStv subscribers using MWeb’s uncapped bandwidth can stream DStv to their desktop.
The cost of bandwidth definitely needs to fall and greedy profiteering needs to end, or such innovations will be choked. Hopefully the new players will fuel that evolution.
The last mile remains a problem, Fourie says, but Telkom and other companies have done a lot of upgrades in the past few years. Even so, the internet in Africa is still reaching a very small market.
“We need to do a massive drive to get the costs down and get technology into houses at an affordable rate,” Fourie says.
