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12 October 2009

Telkom’s undersea capacity augurs favourably for customers and 2010

There are at least nine undersea telecommunication cables (including SAT3 and SAFE) that will connect various parts of Sub-Saharan Africa to the rest of the world by the end of 2011.

Importantly, figures from 2003 to 2009 indicate that, STM-1 IPLC (International Private Leased Circuit) pricing to Europe have seen substantial reductions, while cable upgrades have contributed to significant increases in the total available capacity. SAT3 and SAFE, for example, commenced service in 2002 with a mere 20Gb/s of equipped capacity but, by the end of October 2009, both cables will be equipped with capacity that exceeds 300Gb/s.

Furthermore, during the period 1993 to 2009, while the total cumulative investment in submarine cables continued increasing, the cost per gigabit after each upgrade continued reducing owing to technology changes and the fact that only land-based equipment needed to be additionally equipped.

“In essence, statistical trends clearly show that while capital investment and overall cable capacity have been significantly enhanced over the recent years, the costs per Gig capacity over the concomitant period have drastically dropped,” said Alphonzo Samuels, Telkom’s Managing Executive for Wholesale Services.

He added: “From a Telkom perspective, between 2002 and 2009, there has been an IPLC price decrease of 90% since the inception of the SAT3/WACS/SAFE cable system – S3WS for short. What this essentially means is that Telkom has enabled the market to pass on price reductions to their customers.”

As far as upgrades go, Samuels explained that Telkom’s undersea capacity has been significantly upgraded, especially with the 2010 FIFA World Cup™ in mind. “For example, by the end of 2009, the SAT-3 and SAFE upgrades to at least three times their current capacity will be concluded,” stated Samuels.

“This is extremely significant to us as a national supporter of the 2010 FIFA World Cup. Remember that, even without the latest upgrades, the backbone ICT infrastructure that was provisioned by Telkom for the FIFA Confederations Cup that was played during June this year, saw 100% broadcast efficiencies being enabled by Telkom without a single second of downtime being recorded,” Samuels said.

He added that SAT3 provided the shortest route to Europe while SAFE was the shortest link to Asia. “Furthermore, S3WS, not only offers fully diverse solutions out of South Africa, but also has adequate spare capacity to fully cater for 2010. From an undersea capacity perspective, therefore, it’s all systems go for the World Cup next year,” emphasised Samuels.

He also explained Telkom’s robust strategy with regard to cable investments. Samuels stated that leading and participating in well financed cable consortiums with leading African and global operators enabled Telkom to secure ownership in numerous geographically relevant cables without having to fund the full cable cost on its own.

Telkom’s investment contribution in core cables attested to this, said Samuels. The Company’s cable investments included COLUMBUS3, SEA-ME-WE3 (South East Asia-Middle East-Western Europe), SAT3/WASC/SAFE (South Atlantic Telecommunications / West Africa Submarine Cable /South Africa Far East), EASSy (East Africa Submarine Cable System), EIG (Europe India Gateway) and WACS (West Africa Cable System).

“We prefer to invest in consortium cables as consortiums comprise of global operators with financial strength, operating experience, significant customer bases and market share as well as diverse revenue streams,” Samuels said.

“Our investments are therefore geared by the participation of other operators and we firmly believe that investment sharing translates to better unit costs and improved customer prices,” he added.

On the issue of undersea bandwidth prices, Samuels stressed that it was important to compare “apples with apples”. In general, when purchasing undersea bandwidth connectivity from Telkom, customers also acquired redundancy, security, preventative maintenance, protection, restoration, superior availability as well as a proven track record in excess of 15 years.

“Telkom offerings, to date, have only been premium packages but, as from today (12 October), a new IPLC product called City to City has been launched by Telkom,” announced Samuels.

The new service offering is a full circuit from Telkom’s Barrack Street or New Doornfontein exchanges via Melkbosstrand to Telehouse East or Telecity 1 in London. City to City bandwidth options will initially comprise an STM-1 offering that is route specific. Access to the customer premises from the Telkom point-of-presence is excluded and no restoration or redundancies are included.

“The Synchronous Transport Module level-1, or STM-1, has a data capacity of 155 Mb/s,” explained Samuels.

He also advised that, in general, consumers of undersea bandwidth should ensure that their service provider enabled local access while providing a fully protected backhaul, in-system cable protection, cable restoration and offered competitive pricing, cable route safety as well as special cable precautionary measures.

“We are confident that Telkom offers all of this and, as from today, has even diversified our international undersea cable product offering to cater for different market needs,” concluded Samuels.

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.