Presentation Transcript

1. 3rd African Peering and Interconnection Forum (AfPIF)

   August 2012 The Role Submarine Cables can play in the Interconnection of Africa's Internet Aidan Baigrie 18.03.2011 AfPIF
2. AfPIF today “Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That's what we're doing.” Jimmy Wales, founder of Wikipedia AfPIF 18.03.2011 2
3. Agenda The role of submarine players in an African Internet Setting the tone A vision of the African Internet Filling the void Summary “Broadband is to the 21st Century what railways were to the 19th Century” AfPIF 18.03.2011 3
4. INTRODUCTION Opportunities for bandwidth providers are endless… Where was Africa (2009)? Africa: the least penetrated continent in the world Most of Africa had no internet or was solely dependent on costly and high latency satellite, until recently… AFRICA Source: ‘Broadband penetration’ WBIS 2008 AfPIF 18.03.2011 4
5. SETTING THE SCENE How demand is looking… Demand growth is not tapering off Cisco predicts that mobile devices will surpass the population by the end of the year (US ‘11) Smartphones largest consumer of mobile data (6EX/m in ’16) Global view Africa mobile data traffic 104% CAGR (2011-2016) = 36x = the highest of any continent on the planet (Low base?) Internet penetration here has grown 60% in 2 years (‘12) By 2013, more smartphones than normal phones sold says MTN (<50$) Africa view Of 10m internet users in SA, some 8m are mobile/ wireless driven AfPIF 18.03.2011 5
6. SETTING THE SCENE What’s driving demand… Possible demand in 2100… (UN) AfPIF 18.03.2011 6
7. Setting the scene The way in which traditional brick and mortar industries rules business is changing… Demand in one day 172 million unique people visited Facebook 400 million queries on Google 864 000 hours of video uploaded to Youtube 294 billion emails were sent The first 3 bullets represent a few of the most valuable tech companies on earth – ask yourself…what are their assets? AfPIF 18.03.2011 7
8. Setting the scene This growth has come through one key concept…the understanding that affordability unlocks demand AfPIF 18.03.2011 8
9. SETTING THE SCENE Affordable pricing works better, sufficient ROI and ongoing maintenance revenues are key though Africa’s ACTUAL demand curve Africa’s PERCEIVED demand curve Price Demand 2009 2012 Price Price: 100 USD/Mb R 1c/ MB Speed: 70 mbps capable BTS 10 mbps adsl Price: 3000 usd/Mb 25c / MB Speed: 2-7 mbps capable BTS 0.384 - 1 mbps adsl ? Demand AfPIF 18.03.2011 9
10. A VISION OF THE AFRICAN INTERNET Whilst building an African Internet is driven by organic and often random growth, there are some key ingredients Reliable and pervasive Infrastructure IP enablement and peering Building local content … and a well-oiled regulatory environment AfPIF 18.03.2011 10
11. A vision of the African internet We see devotion to the following elements as key to driving an African Internet Key ingredients of an African Internet Fostering intra African connectivity through reliable and affordable Subsea, Regional, National, Metro and Access connectivity Fibre to enterprises and mobile to the masses AfPIF 18.03.2011 11
12. A vision of the African internet We see devotion to the following elements as key to driving an African Internet Key ingredients of an African Internet Fostering intra African connectivity through reliable and affordable Subsea, Regional, National, Metro and Access connectivity Fibre to enterprises and mobile to the masses Local carrier neutral datacenters, and easily accessible open-access exchanges and meet-me points Peering and sharing of local content to reduce costs, encourage uptake and drive up usage AfPIF 18.03.2011 12
13. A vision of the African internet We see devotion to the following elements as key to driving an African Internet Key ingredients of an African Internet Fostering intra African connectivity through reliable and affordable Subsea, Regional, National, Metro and Access connectivity Fibre to enterprises and mobile to the masses Local carrier neutral datacenters, and easily accessible open-access exchanges and meet-me points Peering and sharing of local content to reduce costs, encourage uptake and drive up usage Intelligent IP based networks Cloud and mobile integration into basic m-services, hosting of content locally to provide true mature market experiences And of course….a well oiled regulatory environment AfPIF 18.03.2011 13
14. Some challenges We see some hurdles to overcome though… Challenges to overcome (1/2) Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges AfPIF 18.03.2011 14
15. Some challenges We see some hurdles to overcome though… Challenges to overcome (1/2) Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges National transit is multiples more expensive than international transit in many African countries, e.g. customers pay more to access information in their own country than the rest of the world(don’t browse locally please) AfPIF 18.03.2011 15
16. Some challenges We see some hurdles to overcome though… Challenges to overcome (1/2) Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges National transit is multiples more expensive than international transit in many African countries, e.g. customers pay more to access information in their own country than the rest of the world Whilst National IP networks exist, there is still a need for affordable pan-African regional IP networks AfPIF 18.03.2011 16
17. Some challenges We see some hurdles to overcome though… Challenges to overcome (2/2) Cloud providers are finding it costly to place equipment in country and finding it difficult to navigate the regulatory and sovereign complexity of delivering a service in Africa National Policy can work against sharing resources and regional hubs International carriers struggle without single SLAs and predictable, reliable services [Zoom-In] AfPIF 18.03.2011 17
18. Some challenges The journey of a byte goes hrough many hands before it arrives here Broadband Components 1 a. Mobile Phone 2a. Wireless/ Tower Fibre NW 1b. Home 2b. Last Mile/Backhaul ------------------------- 3. ISP (Services+Cloud) 4. Longhaul 5. Submarine capacity 6. Internet breakout Internet Local cloud 6 3 4 5 2a 2b 1a 1b AfPIF 18.03.2011 18
19. Key steps What do we believe is our responsibility in achieving an African Internet? SEACOM’s role AfPIF 18.03.2011 19
20. Key steps What do we believe is our responsibility in achieving an African Internet? SEACOM’s role Working as a Network of cables Providing full IP services over the network with inherent resilience through East/West breakout AfPIF 18.03.2011 20
21. Key steps What do we believe is our responsibility in achieving an African Internet? SEACOM’s role Working as a Network of cables Providing full IP services over the network with inherent resilience through East/West breakout Creating partnerships with terrestrial and last mile providers ot provide integrated services (single SLAs) Partnership models between fibre players to utilize existing fibre and to ensure affordability of FTTx models for ISPs 1 AfPIF 18.03.2011 21
22. Key steps What do we believe is our responsibility in achieving an African Internet? SEACOM’s role Working as a Network of cables Providing full IP services over the network with inherent resilience through East/West breakout Creating partnerships with terrestrial and last mile providers ot provide integrated services (single SLAs) Partnership models between fibre players to utilize existing fibre and to ensure affordability of FTTx models for ISPs Providing capability for Exchange points in selected PoPs, bringing multiple subsea and terrestrial cables together with customers Building a cloud services platform through Pamoja, that changes the way global content players think about Africa – fostering the creation of local services and the aggregation of international services…locally AfPIF 18.03.2011 22
23. Some challenges We see some hurdles to overcome though… Challenges to overcome Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks… not to mention high quality builds… AfPIF 18.03.2011 23
24. Some challenges We see some hurdles to overcome though… Challenges to overcome Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges AfPIF 18.03.2011 24
25. Some challenges We see some hurdles to overcome though… Challenges to overcome Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges National transit is multiples more expensive than international transit in many African countries, e.g. customers pay more to access information in their own country than the rest of the world AfPIF 18.03.2011 25
26. Some challenges We see some hurdles to overcome though… Challenges to overcome Reliability of subsea and terrestrial fibre is not optimal yet, there needs to be further development on resilient routes and mesh metro networks Fibre into Enterprises is unaffordable without critical mass (chicken and egg) Many Data centers still embrace crippling pricing and as such don’t facilitate regional exchanges National transit is multiples more expensive than international transit in many African countries, e.g. customers pay more to access information in their own country than the rest of the world Whilst National IP networks exist, there is still a need for affordable pan-African regional IP networks AfPIF 18.03.2011 26
27. summary We believe that to strive for an African Internet, one needs a clear vision and clear plan of actions to get there Affordable pricing, and a grasp of how large the potential really is We understand the African Internet and see ourselves as not a cable, but a Pan-African Network …let’s continue pushing - there is still a lot to be done AfPIF 18.03.2011 27
28. Thank you. Building the African Internet 18.03.2011
29. BACKUP 18.03.2011
30. TheN CAME CLOUD Cloud computing for enterprises started to boom… Source: AMI-Partners (www.ami-partners.com) 2012 AfPIF 18.03.2011 30
31. THEN CAME CLOUD This added stress to original Cloud models…already straining under video and music services… (think Apple TV and iTunes Match) enterprises have more stringent requirements on cloud services than consumers...cracks appeared… “Gmail can be slow, but not when it’s your enterprise solution….” AfPIF 18.03.2011 31
32. CLOUD EVOLUTION The cloud did a u-turn… The cloud is decentralizing (making click and scream…click and stream) IaaS, SaaS, Paas…… (Azure, EC2…) How does this fare for Submarine players? Bad right? Not necessarily….60hrs/min AfPIF 18.03.2011 32
33. Infrastructure plight So again, the challenges are there but demand is still strong…. Yet history tells us…. AfPIF 18.03.2011 33
34. Infrastructure plight Submarine cables > Commoditization Sunk costs Low variable cost of sale Price elasticity responds to price – so drop it… Over-the-top players reap the fruits All the big brands… p High demand elasticity v AfPIF 18.03.2011 34
35. Infrastructure plight Some models that work Stay… Vertical integration (product layering) Horizontal integration (value chain consumption) The Pamoja model (share the apple pie) AfPIF 18.03.2011 35
36. SOME TAKEAWAYS Demand BIG (driven by mobile) The gap is closing fast and the bullwhip may be there… Demand not going away in Africa But there are challenges for Broadband infrastructure players Cloud isn’t one of them – contrarily as we grow more dependent on cloud services, the threads that link the cloud are more critical than ever AfPIF 18.03.2011 36
37. … Random facts on YouTube. AfPIF 18.03.2011 37
38. INTRODUCTION London to CT shows how disproportionate costing is & the important role of competition in Fibre Procurement Backhaul (9%) Distance Submarine (90%) Last mile (1%) Fibre Broadband value Price $ Submarine (50%) Backhaul (30%) Last mile (20%) 6x 36x Price/unit multiplier 1x H SEACOM SAT 3 (Telkom) SAFE (Telkom) WACS (Telkom) EASSy Ace? SAex? … M Telkom Neotel BBI DFA NLD … Competition (Fixed line) L Telkom … AfPIF 18.03.2011 38