South Africa - EaSSy undersea cable is now live and appears to be sparking a price war

[mybroadband] EASSy’s international bandwidth prices causing a stir in South African market

The Eastern Africa Submarine Cable System, better known as EASSy, started offering commercial services on 30 July 2010.

To date the undersea fibre optic cable system company has flown under the radar, but market speculation suggests that they are entering the local market with aggressive pricing.

According to a reliable source they can land an STM-1 (155 Mbps) with full onward Internet bandwidth from Djibouti (where EASSy terminates) to London and beyond for around US$360 (±R2 475) per Mbps per month. This price rivals the most aggressive pricing on SEACOM and SAT-3/SAFE.

According to information received by MyBroadband, the cost of an STM-1 on EASSy on a 5 year contract is well under US$50 000 (±R343 730) per month. This price excludes a once-off connection fee of US$12 000 (±R82 487) and onward bandwidth from Djibouti.

This pricing is aggressive enough to make many local telecoms operators and ISPs sit up and take notice, and West Indian Ocean Cable Company (WIOCC) Director Mike Last says that it is encouraging that the message about EASSy’s competitive pricing is getting out there.

Last would however not confirm pricing levels, merely saying that pricing is dependent on the specific requirement of their customers.

“Some are looking for small amounts of capacity (as low as a 2Mbps E1) with a short-term commitment (as little as 1 month for one-off requirements). Others are seeking to make a strategic long-term investment in large amounts of capacity – in some cases to sustain their capacity requirement into and out of the eastern and southern Africa region for the next 10 years or more. Pricing is different for the two cases,” Last explained.

“The exact per-Mbps pricing depends on the amount of capacity purchased, the terms of the purchase and the length of the commitment. Operators making long-term commitments to large amounts of bandwidth secure better per-Mbps rates than those committing to small amount for shorter periods,” said Last.

“Both wholesale and retail markets are supported, and many prices exist on any given route,” Last concluded.

SEACOM has recently announced that it will be offering IP transit services in Africa and South Africa, adding that they will reassess their current pricing structure to make it more aggressive.

EASSy’s arrival in the country may well cause another price war, and with both WACS and Main One looming on the horizon South Africa may be in for a treat in terms of international bandwidth rates.

EASSy to spark another bandwidth price war?