West African capacity prices ‘to drop tenfold’

The new submarine cable systems planned to serve Africa’s west coast will, once all completed and lit, precipitate a dramatic fall in wholesale capacity pricing across the region, according to analyst predictions.

“We’ve already seen the launch of Main One and Glo1,” said Kalyan Medapati, analyst with consulting firm Informa. “The West African Cable System (WACS) and ACE cables look like they’ll be live soon. We should then see a capacity price war, which will translate into lower prices for services in major regional economies, like Nigeria.

There’s already been some decline in wholesale pricing, but I’d say in a year’s time that pricing could be down tenfold on today’s levels. Years of monopoly by the SAT3 cable have built up a pressing need for more capacity and more competition in west Africa, an issue that is already well on the way to being addressed in east Africa. The historic dependence on satellite for international traffic will soon be gone.”

The 5.1Tbps WACS cable has landed in Namibia, the country’s first submarine link to the world. An extension of the cable to land-locked Botswana is now planned.

The World Bank meanwhile has invested $79 million in Nigerian infrastructure provider IHS in order to help it develop its mobile phone infrastructure across the country.

IHS will use part of the funds to build and acquire mobile phone towers in Nigeria and across other regions in sub-Saharan Africa.

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