Just the threat of landing a 15 000km fibre optic undersea cable on South Africa's shores has forced down broadband prices 90%, according to Seacom's president Brian Herlihy.
He says that when Seacom announced its intention to launch the $600-million undersea cable project, operators in South Africa were pricing broadband at R8 000 per megabit per month and that prices have now dropped as low as R800 per megabit per month. "We have created competition before we even landed the cable," says Herlihy.
But Seacom plans to halve these prices again when it enters the market in June 2009 with a price of R435 per megabit per month.
"With only eight months to go before the system is ready for service, Seacom remains set to become the first cable to connect East and Southern Africa to the rest of the world with plentiful and inexpensive bandwidth," says Herlihy.
He says a simple calculation shows that South Africa needs about 50 gigabits of international capacity to service the one million broadband subscribers in the country, but has only 10 gigabits.
"International capacity has been choking the data market in Africa for years now," says Herlihy.
Initially Seacom will deliver 80 gigabits of international capacity through its cable but can meet more demand easily because the cable has a potential capacity of 1,28 terabits (1 280 gigabits).
full story from M&G here