Internet | What is happening with Seacom anyway?

By Lyndi Lawson

Widely hailed as the redeemer of African internet connectivity, this Seacom thing has been something of an anticlimax. So far though, broadband internet is still expensive and even from the comfort of my office, data transmission is far from instant. Frankly (like many other South African and African consumers) I’m tired of waiting. With few alternatives to this interminable wait, I’ve done some investigation into the great confusing abyss of information around Seacom with a view to finding out the status quo, the challenges resulting in the hold up and how the whole bang shoot is going to impact on African business and on the little squibs like myself with a penchant for streaming video.

The Birth of Africa’s Undersea Network

Let’s start at the beginning. For those of you who don’t read the news, Seacom is the new undersea cable that will theoretically increase the broadband internet capacity of East Africa initially and later the inland countries. Before Seacom, there were two major ways that South Africans could connect to the Internet: via the Telkom dominated SAT3/SAFE line (which was expensive as happens where there exists an industry monopoly) or via satellite (which was not only expensive but also slow). Seacom offers another alternative, introducing much needed competition to the telecommunications industry. With the ability to carry about 1.28 terabits of data traffic per second, it also has speed on its side.

The 17 000km long cable is 77% African-owned and will allow for high-speed broadband access in East Africa initially, and later in the landlocked African countries in desperate need of connectivity. After hold-ups as a result of those deviant Somali pirates, the line successfully landed at the Neotel-owned station in Mtunzini, north of Durban on the 24th of July. Who’s Neotel? You really need to get out more. They’re essentially Telkom’s competition – the company turning the South African telecommunications industry into an oligopoly. Anyway, Seacom is also one of the many undersea lines that will run into Africa. Arthur Goldstuck – who heads up the World Wide Worx research organisation – argues that in combination, these cables will have a data carrying capacity of over 10 530 gigs per second by 2013, rendering “the connectivity landscape completely unrecognizable for both South Africa and the rest of the continent.” That’s just over 3 years away. Despite this, we are not yet seeing results. Why?

Seacom: The Formative Years

Seacom is not without its growing pains and in the months to come there will be several challenges that will require solutions. First off, there’s a question of back up, or the lack thereof. Let’s say a hungry shark takes a fancy to the cable and takes a nibble out of it. Yes, admittedly unlikely seeing as it is an undersea cable, not an in-sea cable, but nonetheless… The point is that technology fails all the time for one reason or another and I don’t see any immediate reason why this should be any different. The problem with this is in the event that technology fails Neotel, businesses in South Africa relying on the cable will suffer severe internetlessness until the cable can be repaired. Heaven help us if it happens off the coast of Somalia. This fact alone might make businesses hesitant to climb into bed with Neotel, at least until the additional cables destined for South Africa arrive.

There’s more though. While there’s no doubt that Seacom has the potential to revolutionise the Internet in South Africa and across the continent, it has been noted that this will depend largely on its management. Seacom’s business model may be based on principles of high volumes and low prices with non-discriminatory access, but what if they’re the only ones? While theoretically, this infrastructure should deregulate the industry, with the benefits of the technology falling to the consumers, there’s concern that there might not be such a happy ending after all. For squibs like you and I to benefit from this technology, our Internet Service Providers (ISPs) need to cooperate. Some have existing contracts with Telkom that could last for years to come, while others might feel that to increase their profit margins, they need to sell us more bandwidth than we can use and package it in large increments so that it remains prohibitively expensive. Regardless of this though, there’s a consensus that as individuals, we aren’t going to see much benefit until later this year at least with it being more likely to trickle down early in 2010.

Despite the fact that we might have to wait a little while to enjoy the benefits of all of the juicy bandwidth that Seacom and its other cable friends will bring us, it will ultimately happen. And what then?

Seacom All Grown Up

Let’s assume that ISPs like Neotel keep their greed in check and that Brian Herlihy’s dreams of connecting Africa to the world do come to fruition. What will this mean for Africans and more importantly, what will it mean for consumers and ultimately for the businesses that target them? The likelihood is they will follow the trends in Internet behaviour, the foundations of which have been laid by high broadband countries like the United States.

Consumers will have access to the Web as they have never experienced it before. Like in the rest of the world they will not only have access to infinite amounts of information, but they will come to depend on it. Users who are used to email and limited browsing will suddenly have access to unimaginable quantities of content and the ability to participate in online gaming, social networks, and streaming video and audio. Ultimately, Africans will be able for the first time, to truly connect with the rest of the world. Mobile Web access, already a major player in Africa, is likely to grow exponentially.

For business, the impacts of this fundamental shift in their market are multifaceted. First off, we have the newfound element of competition that will be introduced. With this kind of access, it is easy for discerning customers to investigate products and pricing with a view to getting a better deal. Service providers and retailers will need to cater to this new found literacy and those who don’t will miss the wave and find themselves left behind. Fortunately, within these great challenges lie great opportunities. The World Bank Report, Information and Communications for Development 2009: Extending Reach and Increasing Impact reinforces the relationship between economic growth and broadband access. This projected growth will surely benefit all stakeholders.

In their favour is the fact that while Internet penetration is likely to reach 33% in South Africa by 2018, the growth of high level engagement is likely to happen more slowly. The same Arthur Goldstuck points out that the Experience Curve illustrates that users need to be online for 5 years or more before they feel confident enough to participate in online retail and other interactive applications. That said, my mum definitely hasn’t been using the Internet for 5 years and she shops online a considerable amount. Perhaps with higher adoption rates, people feel more confident, more quickly?

The conclusion is that businesses need to act fast if they want to retain market share in a more competitive environment. While this will require education from the top down in every government and every industry, businesses and consequently economies and thus indirectly all Africans stand to benefit tremendously from universal broadband access. I just hope the Somali pirates can be convinced of that. Perhaps if we start a Facebook group through which they can voice their demands, they’ll leave my cable alone?

This article is published under the Creative Commons Attribution license.