This post summarizes many of the key concerns you must keep in mind when in purchasing 2africa capacity.
- Obviously, the more capacity a vendor has, the lower it can go on price.
- In the major telecom hubs like South Africa, Kenya, and Nigeria, 2Africa providers typically have fibre to at least one carrier neutral data centre or the CLS itself is in a telecom hotel. So the minefield of the opportunistic African cable landing station operator can be avoided. Indeed, in many of those countries the CLS itself is really just a cage or a room in a carrier neutral data center just like the Equiano CLS in the Open Access Data Centre in Lagos.
- Buyers must be much more careful in the secondary markets. In some of those markets the 2Africa cable has no back haul to telecom hotels and the CLS is revamping itself or portraying itself as a carrier neutral site in accordance with the 2Africa consortium’s open cable model. But the proof of the pudding is in the eating as the English say. It is not at all clear that the CLS operators in countries like Senegal or Madagascar or Mozambique will honor their committment to fair and nondiscriminatory pricing in matters such as cross connects, power, and space. So it is foolish to order circuits into such locations without a detailed and comprehensive written contract specifying pricing for all three items as well as a provisioning SLA. Everything important must be in writing.
- Returning to the first point, the big Indian and Chinese carriers have lots of 2Africa capacity, but they in general do not have metro fiber rings. In many markets like Kenya, South Africa or Nigeria there are a large number of important data centers. For example, in Lagos, there at least four, namely OADC, Medallion, MDXI Equinix, and Rack Centre. I can guarantee you that none of the Asian carriers will have fiber to most of these locations. Sure, they can buy loops. But 100G wavelengths between Lagos data centers vary typically from $6K to $15K per month and those charges in addition to the subsea fees often completely annihilate your business case. My advice is to focus on African carriers that have 2Africa capacity because they are much more likely to have those precious metro rings. Much of the time they will want to charge extra for this metro connectivity, but at least you can negotiate and get a package discount.
- I recommend one or two year contracts because I believe that 2Africa will push down pricing a lot in markets where there is already significant subsea competition like Lagos, South Africa, and Kenya. So short term contracts are the way to go. Equiano has already reduced 100G wave pricing between Lagos to Lisbon from $35K to $45K down to $20K to $35K a month. The simple fact is that there will be more subsea capacity than most African countries can readily absorb due to the slow buildout of the Last Mile and the heavily reliance on low bandwidth mobile services.
- The big Chinese and Asian carries are struggling to adapt to the local market. I know of one Equiano buyer who ordered a 100G wavelength in March from an Indian carrier and is still waiting for delivery. That’s a long time. Again, buyers are much better off focusing on native players like Bayobab or WIOCC for whom these countries are their backyard and not an alien planet. I can recommend other carriers as well. Just contact me at roderick.beck@networksourcing.net.
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