|Terabytes to Africa at $2-3/Broadband Connection|
|Written by Dave Burstein|
|Wednesday, 20 April 2011 11:53|
500 gigabits of the West African Cable System landed at Yzerfontein in South Africa yesterday, with connections along the way to Namibia, Angola, the Democratic Republic of the Congo, the Republic of Congo, Cameroon, Nigeria, Togo, Ghana, Côte d’Ivoire, Cape Verde as well as the Canary Islands, Portugal and the United Kingdom. WACS is ultimately designed for 5 terabytes and higher.
Back of the envelope, the $500M cost of the Alcatel-built cable equates to a landed price of $2-3/broadband customer for generous international capability. Although cable capacity is sold as 20 year IRU contracts, I think it's more realistic to spread the cost over 10 years. That's about $100K/gigabit/year, or just under $10K/month. Add $4K to purchase transit in London, and the direct operator cost is $12-16K/month/gigabit. Add markups and uncertainties, and the delivered cost/gigabyte to the large operator is $20-30K/month. Allocating 100 kilobits/customer - more than most networks average - spreads that 10K customers at $2-3/month.That's more than the $1/month typical in most of the U.S. or Europe, but no longer a great barrier to delivering a full Internet experience to most of Africa. The question now is whether the savings will be passed on to consumers.
The problem: "Telco competition in South Africa is like pro-wrestling. There's a lot of shouting and posturing but the game is fixed." Song.
A larger version of Steve Song's great map below and his presentation on the remarkable growth of fiber to Africa is worth a look http://bit.ly/hg9Wqf. The other map below, from the Ubuntu Alliance, shows the relative lack of fiber connecting inland Africa.
Caching, local p2p redirection, and the limited capacity of Africa's mostly wireless networks can bring the required bandwidth well below 100K/customer. http://bit.ly/i0bgyo