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Send  Share  RSS  Twitter  17 Jan 2011

TELECOMMUNICATIONS:  SA Broadband in 2011: All About Advancing Forward


Recent Gauteng Business News

2010 was a revolutionary year for the South African internet user. Having kicked-off with the launch of the Seacom cable, the introduction of cheap uncapped ADSL offerings, followed by Telkom rolling out line speed upgrades across the country, South African broadband is on track - but we still have a long way to go and a lot to look forward to.

While these events have led to some significant price cuts across the industry, most of the cuts occurred at a cost to the consumer. Quality and speed across the board have been largely neglected as ISPs continue to chase the lowest price denominator while simultaneously failing to educate unsuspecting consumers as to the additional costs inherent in low prices: slower speeds and a diminished online experience.

So where does this leave the South African internet consumer still looking for fast, reliable and affordable internet? Looking to 2011, three major factors will dictate the course of their quest.

1. SA Fibre - Reducing Local Transit Cost
Neotel and FibreCo will be offering newly deployed local fibre connectivity between Johannesburg and Cape Town, in direct competition with Broadband Infraco and Telkom. This will mean a significant drop in local transit costs for ISP’s and make for easier peering.

2. WACS (West Africa Cable System) - Reducing International Transit Cost
Lighting late 2011, at 3.8tbps (at least three times the size of Seacom),WACS should have a very positive impact on the cost of International connectivity. The effect will be gradual though, as it will take time for ISP’s to buy and provision the bandwidth.

3. LLU (Local Loop Unbundling) - Reducing Last Mile Cost
This involves reducing Telkom’s monopoly on last mile services and is the most important factor as it currently makes up the majority of costs for ADSL. The LLU plan is being pushed for completion by new Communications Minister Roy Padayachie for November 2011.

There is no doubt that the South African market will continue to demand cheaper bandwidth in 2011, and that cost reductions will remain a dominant point of focus, but what we also need is more pressure on providers to deliver not only cheaper services, but also improved quality and faster speeds. Only then will SA broadband begin to reach the world-class standard that we deserve.

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