Seacom has emerged as a clear front runner in the African undersea cable stakes. They are the first initiative to declare a completion date, 17 June 2009 (after which cable company Tyco will incur performance penalties). More impressively they have revealed their wholesale pricing scheme which looks like this:

According to

The company will have a four tiered bandwidth pricing approach where bandwidth prices for larger products, in this case STM-64, STM-16 and STM-4 connections, are sold at reduced rates to the standard STM-1 connection.

Their price for an STM-1 connection however sets a roof for the resale of bandwidth by larger bulk-bandwidth buyers thereby ensuring that smaller players receive a competitive rate.

The price for an STM-64 connection, supplying 9.6 Gbps of bandwidth, is $ 1 663 875 or R 267-00 per Mbps per month. The price per Mbps per month for a STM-1 (155 Mbps) service is R 673-00 while a STM-4 (600 Mbps) connection costs R 575-00 and a STM-16 (2.5 Gbps) service will cost R 435-00.

For the uninitiated, an STM-1 (also known as OC-3) equates to a capacity of 155.52 Mbps. STM-4 (or OC-12) is 622.08 Mbps, STM-16 (or OC-48) is 2.488 Gbps, and finally STM-64 (or OC-192) is 10 Gbps. Here is a handy list of line speeds.

Contrast this with the best VSAT price that the Partnership for Higher Education in Africa has been able to negotiate on behalf of African universities of about $2400 dollars Mbps per month for an entire transponder, which was itself a huge drop from an average of $15000 dollars per Mbps that many universities were paying prior to this. As little as 2 years ago TENET were paying Telkom $4000 per Mbps per month for its access to SAT3. ResearchICTAFrica report in their Sector Performance Review of South African telecoms that in a cross-country comparison, Telkom have been found to be charging up to 800% more than their counterparts in other countries for access to SAT3.

All that to say that Seacom and the other undersea fibre initiatives are bringing a tectonic shift in competition and pricing for Internet access to the region. Standby for significant knock-on effects in the telecommunications industry in general. I have a particular soft spot for Seacom as they have embraced Research and Education networking for African universities as part of their corporate social responsibility program offering below-cost access for African universities. This is surely caressing the hand that feeds! Right-on Seacom!

Posted by Steve Song

@stevesong local telco policy activist. social entrepreneur. founder of @villagetelco #africa #telecoms #opensource #privacy #wireless #spectrum #data