In light of our feature article in this edition of Africa Telecoms, briefly describe how you feel about Seacom assisting with breaching the digital divide in Africa?
SEACOM is providing a large broadband connection to global networks. Consumers will be using the internet in ways they wouldn’t think of today: on-demand movies, music, home-made video, watching news programs, etc. With new web applications and uses being discovered daily, the potential economic benefits of affordable bandwidth are endless. In Africa, it is projected that there will be a major demand for bandwidth driven by some of the following “hotspots”:
• Tanzania is growing a logistics hub for eight East & Central African countries
• Uganda and Zambia are set to develop strong pharmaceutical research centres
• Kenya is looking at becoming a call centre hub with a major focus on Small & Medium Enterprises
• Rwanda, which has developed a visionary broadband strategy, is looking to establish a hub of bilingual call centres.
SEACOM often hears stories about the impact of inexpensive bandwidth on global Internet content in Europe, North America and Asia; however, SEACOM has seen much African-produced content that will vastly benefit the world. Recently, we met with a research group that is gathering data from traditional healers on homeopathic medicines. We were amazed to learn of the information being gathered and the potential to add to medical research globally. SEACOM’s partnership with southern African research and education networks through TENET (Tertiary Education and Research Network of South Africa) will facilitate faster development by providing subsidised international bandwidth to research and education networks across 40 universities. These education and research institutions now have 50 times more bandwidth at the same annual cost prior to the arrival of SEACOM. Bandwidth now equals the amount which was available to the entire Southern African population in 2008. TENET owns the capacity for the remaining life of the cable, resulting in substantial annual savings whilst enabling the affiliated institutions to develop and increase their international research collaborations and distance learning programmes. SEACOM is working to replicate this programme in East Africa.
Do you have an example of this scenario already or is it too soon?
We’ve already seen a decline in international long haul prices at the end consumer level. In East Africa specifically, Kenya’s progressive approach to telecoms, has resulted in large amounts of bandwidth being made available at a fraction of the cost, resulting in a reported 200% increase in data traffic within 14 days of SEACOM’s launch. South Africa has disappointed SEACOM in translating low cost international bandwidth into reduced consumer price. This is largely due to the major operators investing in their own cables and slowing any adoption of our cable. They also have a large consumer dependence on the incumbent’s terrestrial backhaul and last mile, limiting the ability for ISPs and operators to pass on savings. There has been a marked improvement though. In September 2009, for example, MTN announced a 50% increase in capacity for certain corporate clients in South Africa while Telkom and M-web also announced similar increases. Connectivity is now available, and it's up to governments and internet service providers to pass on savings and capacity to their customers, circumventing constraints and bottlenecks wherever possible.
What is your opinion regarding cheaper broadband which will benefit those who already have access to the internet against those of those who currently have no access ?
Through supplying plentiful bandwidth at a fraction of the current cost, there is no doubt that SEACOM’s arrival opens up unprecedented opportunities for governments, business and ordinary citizens alike. They can finally make use of a network which forms a platform to compete globally, drive economic growth and enhance quality of life. Providing broader access to Information and Communications Technologies (ICT) in Africa is a catalyst to unlocking sustainable economic and social development. By supporting a broad range of stakeholders its possible to develop, create growth and promote the continent as a serious player in the global economy.
From this point onwards, what do you think the next step is?
Now that Africa has a solid fibre backbone what more is needed in order to finally bridge the digital divide? An open and liberal approach to telecommunications is essential. Governments hold the key in allowing businesses to exploit ICT-linked opportunities which will enable the acceleration of broadband penetration. There is also the catalyst effect that needs to be considered. Undersea cables will justify an investment in national fibre, fibre to the home, new wireless networks, data centres, call centres and BPOs.
What has been the biggest hurdle thus far with the Seacom Project?
SEACOM is offering one, seamless product to end-users, across 11 sovereign nations. Some of our challenges were tax and contract related. SEACOM, as an international entity, had to figure out how to sign contracts at a local level and then deliver that product throughout all the countries we were involved with. SEACOM had to use its subsidiaries and local partners in each one of these countries, who were already licensed and established, to carry communication infrastructure. You're trying to set that up in a very short period – keeping in mind that construction of the cable is really only 18 to 24 months. The availability of human resources which could interact with a venture such as SEACOM was also a challenge in some countries.
With only a small amount of capacity sold thus far and a total expected capacity of 1280Gbps, what is the projected time-frame that Seacom is working towards in having the full capacity sold and used throughout Africa?
We have seen capacity purchase continue at a healthy pace since the launch. In fact, we were pleasantly surprised to see East Africa leading the charge. As demand increases and users find new ways to utilise the Internet and overall connectivity, we will experience an exponential trend in capacity requirements leading to more purchases. From an investment perspective, we expect a return on this investment within five years.
In your estimation, what effect will the partnership with Altech’s KDN have on Broadband access in Central Africa?
From the outset of the project, we realised the importance of connecting inland countries to the international network and many countries set out to deploy massive terrestrial networks in anticipation of the arrival of real and affordable international bandwidth connectivity. With more and more countries getting connected to the rest of the world via the SEACOM system, it is only a matter of time before we see the direct socio-economic benefits this will have on the entire region. The African market for international bandwidth is expected to swell within a short period of time, with a significant portion of this new demand coming from East and central Africa. Altech and SEACOM have taken a giant step towards unlocking this enormous potential in East Africa. Our success would not be possible without the infrastructure which links our beach landing stations to metropolitan PoPs (Point of Presence). KDN’s extensive inland infrastructure in East Africa will link our landing station in Mombasa to Nairobi, then on to Kampala and Kigali. In addition, we hope to connect Kigali and Addis Ababa soon and will continue to explore further opportunities across central African countries.
Are there future plans to extend the SEACOM network to the west coast of Africa or is the current network as far as the project is planned at the moment?
Although no specific plans are in place at this point, we will continuously evaluate all opportunities and strategic options to compliment and improve our current offering.
What impact will SEACOM’s cable have on traditional voice communications in Africa or is SEACOM purely going to provide data services to the continent?
Access to previously unobtainable, cheap and easily available broadband will allow East and Southern Africa to connect to international broadband networks. The infrastructure should see Africa becoming a major competitor for call centres/business process outsourcing (BPO), research and education. Financial, manufacturing and other sectors will bring down their cost of doing business while increasing their productivity. This will, in part, be possible through the provision of cheaper traditional voice calls using fibre networks. As an example, Gateway Communications has purchase significant capacity on SEACOM.
Democratising Telecoms In South Africa... and beyond
Partnership Will Help Operators in Emerging Market Offer VoIP and Next-Generation Services Easily and Cost-Effectively.
JOHANNESBURG, South Africa – Multisource, the South African wireless services provider, and London-based XConnect, providing next-generation interconnection and carrier ENUM-registry services, have formed a partnership to help South African service providers take advantage of growing opportunities in the country’s increasinglycompetitive telecommunications market.
AN INTERNATIONAL ALLIANCE
The partnership, known as XConnect SA, will establish a multilateral peering federation, which will offer operators advanced VoIP and next-generation network (NGN) peering capabilities via an in-country interconnection hub. The Federation will provide a simple, cost-effective means for exchanging traffic within Southern Africa and globally. The newly appointed CEO of XConnect SA, Christopher Geerdts, said the partnership underpins the principles of Interconnect 2.0, ushering in the next generation of VoIP in South Africa. “Our vision is to democratise voice and multimedia communications by empowering telecommunications players to focus on growing their core businesses whilst reducing barriers of complexity and costs,” he said. He added that one of the key benefits of Interconnect 2.0 is the ‘IP-all-the-way’ principle, which ensures that the quality of calls is maintained and multimedia services can be fully utilised. The Federation services will be launched in May, enabling operators to interconnect their networks and to route calls seamlessly and efficiently through a scalable, multilateral interconnection hub. This single regional hub, enabling multi-lateral IP Interconnection and Peering is based in Telehouse at Teraco in Johannesburg. The single hub will offer, for the first time in Africa, two significant and primary benefits, namely a single point of interconnection between all providers, and subsequently policy management of the interconnection point for those service providers. This considerably reduces the overall costs of managing a complex set of interconnections, in addition to managing interoperability issues between protocols, particularly when set within the imminent multimedia and High Definition (HD) voice environment.With fibre connectivity bringing the possibility of more and improved services, at lower costs, South Africa is on the cusp of a genuine democratisation of its telecoms environment, and a paradigm shift from simply a VoIP environment to a SoIP (Services over Internet Protocol) landscape. The possibility of HD voice and improved multimedia services become a reality through the creation of this single regional hub. In April 2010, U.S. VoIP service providers offering highdefinition (HD) voice services participated in a trial of the world’s first IP-peering federation created for exchanging HD voice traffic. HD voice reproduces human speech with substantially greater clarity, depth and nuance, using codecs that capture more than double the frequency range of traditional circuit-switched calls while generally requiring less bandwidth. The rich, naturalsounding quality of HD voice calls often is likened to that of face-to-face conversations. As a result, fixed, mobile and Web 2.0 service providers are increasingly adopting HD voice as an added value because it enables superior-quality voice communications compared with those supported by the legacy PSTN. However, most HD voice services today are available only within a given operator’s network. Global utilisation of HD voice will require crossnetwork calling, with the entire call path and all endpoints supporting the rich features. The Global Alliance of Federations was set up to enable this. XConnect CEO Eli Katz comments: “Our Interconnect 2.0 services are ideally suited to helping operators in South Africa overcome the challenges of next-generation interconnection and peering. The federation will enable easy interworking and interoperability between fixed, mobile and Web 2.0 networks.” The Global Alliance enables members to deliver advanced IP services across regional and global networks, as well as decrease costs and increase service quality. In addition to reducing termination costs, service providers are spared the considerable time and resource allocations of establishing and maintaining separate interconnection agreements with each of numerous providers. End-to-end IP interconnection also allows for higher call quality than the PSTN can support, as well as multimedia features. “With the proliferation of IP and VoIP players, the complexities and associated costs of interconnecting operators and telecommunication networks have become central concerns for South African service providers,” said Multisource CEO Richard Smuts-Steyn. “To compete successfully in our country’s emerging telecoms market, operators need a secure and scalable point of interconnection and the comprehensive services our federation will offer.”
WHAT THE FUTURE HOLDS
“As we enter an era of explosive growth in South Africa’s VoIP market, in terms of services and complexity, service providers are looking for solutions that can offer more cost-effective ways of communicating and carry the functionally rich bouquet of multimedia communications from end to end,” he added. Smuts-Steyn noted that interconnectivity extends beyond traditional voice connections to include the multimedia environment. For example, he said: “When you talk with someone on Skype, you are able to use both voice and video. When you break out of the Skype environment and connect to a cell phone, you lose the valueadded video connectivity. This is because many networks do not support the complexity of multimedia interconnection. The new federation will provide technically elegant interconnect across all mediums.”The ultimate goal of this partnership is to create a virtual network and provide regional services that instantly integrate with all networks globally, and create a truly global service similar to markets in Europe, North America and the Far East. Within a regional context, the agreement keeps Africa at the forefront of developments in ICT and ensures that the momentum of the last decade towards ICT’s as enablers of development and change remains unabated.
Sidebar: THE 2008 ALTECH RULING: THE IMPLICATIONS FOR AFRICA
The 2008 Altech Ruling by the South African High Court, under Judge Davis heralded the era of true liberalization for the country’s telecom sector. The Transvaal Division of the High Court ruled in favour of an urgent application brought by Altech Autopage Cellular on the question of whether VANS are allowed to self-provide (build their own networks or lease these facilities from companies such as Telkom). “It is declared that the applicant [Altech Autopage] was entitled to self-provide its own telecommunications facilities from 1 February 2005,” acting judge AJ Davis wrote in his judgment. The South African landscape shifted from 2 fixed, and 3 mobile providers (Telkom, Neotel, Vodacom, MTN and Cell C) to up to six hundred fully converged license holders with provisioning rights). According to Alison Gillwald, Director, Research ICT Africa!, The EDGE Institute, “The judgement cuts through the defence of the Ministry and ICASA that any automatic granting of network licences to former VANS operators would result in absurd proliferation of network providers that was not sustainable in terms of the scarce resources required to do so.” This he points out, is simply not correct. Only spectrum is scarce and it is anyway licensed separately. The real cost of building and operating a network would anyway inhibit all 600 potential applicants from operating a network. The benefits to the consumer cannot be under estimated, yet an immediate constraint becomes the ability of multiple service providers to interconnect, and the regulations thereof. ICASA’s Regulations on Interconnect specifies that all providers must interconnect upon request, by law. The days of bi-lateral interconnections are numbered with the requirement for a shift to multi-lateral agreements becoming essential.