The big news this week is that Seacom has been delayed by a month due to pirate activity in April and May 2009.
According to the Seacom blog, an increase in pirate activity in April and May 2009 has necessitated a change in their installation plans, which will result in a delay of around a month.
The launch date has been moved from 27 June 2009 to 23 July 2009.
Seacom is still making progress, though: that section of the cable has since been completed, and the section connecting Mumbai to Africa is expected to be spliced shortly. All the South and East African landing stations have already undergone successful testing.
90% drop in bandwidth prices? EASSyer said than done.
When Seacom was first announced, a 90% drop in bandwidth pricing was claimed to become a reality. We’ve already seen about half of that drop, though. Keep in mind that bandwidth costs aren’t the only costs that ISPs have to deal with: there are quite a few overheads. It costs the same to administer a 1 gig account as a 100 gig one, so pricing on the lower end won’t drop. One must also keep in mind the costs of the network provider’s infrastructure, the cost of the customer’s modem, as well as marketing, distribution, and support.
The large ISPs can’t switch all their bandwidth to Seacom the minute it goes live, as they have contracts in place which need to lapse, meaning that price drops are even further away than we might like.
Telkom’s pitiful announcement gives a painful taste of what the telecommunication companies intend to satisfy us with. They claim that there is too much pent-up demand and that EASSy and MAINONE are needed before we expect a real drop in pricing.
In February, general data manager at MTN Brian Seligman said “we are going to see changes in pricing [as opposed to real decreases], we are going to see changes in structure, and one of the biggest misnomers out there is that these international cables landing are going to drop the price of data by 90%”.
Head of Commercial at iBurst, Steve Briggs, has also been quoted as saying “consumers should not expect to see the sharp falls in broadband pricing that some of the more optimistic commentators have predicted”.
MTN’s Seligman says, “You are going to see different ways of packaging; you are going to see some incredibly innovative ideas from MTN over the course of this year in terms of making data significantly more affordable, significantly less expensive for customers, and that basic R2/MB – that’s not going to change significantly in the foreseeable future.”
Unfortunately there’s no real reason for ISPs to drop bandwidth costs. The vast majority of subscribers do not even deplete their current 2GB limits, so instead of dropping prices extra data will be bundled keeping revenues high, similar to Vodacom’s current data deal.